Yen strengthens from lowest since 2010 as BOJ meets

Yen’s Decline

Japan’s currency has tumbled 13% in the past three months, the biggest decline among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar dropped 0.1% and the euro rose 2.4%.

Sweden’s krona declined for a second day against the dollar as Borg said the central bank’s monetary policy is propping up the currency and preventing the exchange rate from helping to sustain growth.

Because of high consumer debt levels “monetary policy in Sweden as a whole perhaps is a little bit tighter than in other countries and it’s clear that this supports the exchange rate,” he said in Stockholm. “Given the weak economic development it would have been an advantage if the krona had weakened somewhat, that’s clearly the case.”

The Riksbank cut its repurchasing rate for a fourth time in a year last month, bringing it to 1%, and indicated it has finished easing policy. The European Central Bank’s rate is 0.75%.

The krona dropped 0.2% to 8.6930 per euro and slid 0.2% to 6.5285 per dollar.

Swiss Franc

The franc advanced for a second day against the euro after tumbling last week to the lowest since the Swiss National Bank imposed a cap on the currency in 2011.

Option traders are pushing the cost of bearish wagers on Swiss shares to the lowest level in almost seven years amid optimism the recent decline in the franc will benefit exporters.

Puts protecting against a 10% drop in the Swiss Market Index cost 3.6 points more than calls betting on a 10% rally, according to three-month options data compiled by Bloomberg. The price relationship slid to 3.09 on Jan. 17, the lowest since May 2006.

The franc gained 0.2% to 1.2420 per euro.

Bloomberg News

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