Yen advances amid global currency-war rhetoric

‘Scaling Back’

“We had a really big run on the yen, and that’s been followed by a bit of profit-taking,” Greg Anderson, the North American head of Group of 10 currency strategy at Citigroup Inc. in New York, said in a telephone interview. “It may be scaling back expectations of radical movement by the Bank of Japan at its upcoming meeting.”

The euro fell 0.6% against the greenback yesterday, after Luxembourg Prime Minister Jean-Claude Juncker said the exchange rate is “dangerously high.”

The 17-nation currency’s advance is posing a fresh threat to the European economy just as it shows signs of escaping the debt crisis, Juncker, who steps down this month as head of the group of euro-area finance ministers, told an annual gathering of business leaders in Luxembourg .

The dollar stayed lower versus the yen after a Labor Department report showed the cost of living in the U.S. was little changed in December. The consumer-price index’s zero reading matched the forecast of economists surveyed by Bloomberg and followed a 0.3% drop the prior month.

Contained inflation may free the Federal Reserve to continue efforts to drive down unemployment.

Bloomberg News

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