Yen gains as lawmaker says party to oppose Iwata

The yen rose for the first time in five days against the dollar as an opposition lawmaker said his party will oppose Bank of Japan Deputy Governor Nominee Kikuo Iwata, who the market sees as endorsing monetary policy easing.

The pound reached the weakest level since June 2010 versus the dollar and the lowest to the Australian currency since 1985 after industrial output unexpectedly declined. South Africa’s rand slid to the weakest in almost four years versus the dollar after the nation posted a larger-than forecast current-account deficit. The euro erased losses against the greenback as oil and gold rallied.

“It’s about whether the Democratic Party of Japan is going to block Iwata,” Peter Gorra, chief dealer in New York at BNP Paribas SA, said in a telephone interview. “Dollar-yen sold off about 50 points on that pretty quickly. It’s all about positioning.”

The yen rose less than 0.1% to 96.25 per dollar at 10:32 a.m. in New York after sliding 3.1% during the previous four days. Japan’s currency added 0.1% to 125.66 per euro. The euro gained 0.1% to $1.3060 after sliding to $1.2955 on March 8, the lowest since Dec. 11.

The pound dropped for a fifth day against the dollar as the Office for National Statistics said industrial production fell 1.2% in January. The median forecast in a Bloomberg News survey of economists was for an increase of 0.1%.

Pound Weakness

“Momentum is clearly against the pound and if anything that serves as an excuse to carry on, the market takes it,” said Derek Halpenny, European head of global-markets research at Bank of Tokyo-Mitsubishi UFJ in London. “The weak data backup renewed quantitative easing and it’s a clear recipe for further pound weakness.”

The pound declined 0.3% to $1.4865 after sliding to $1.4832, the lowest level since June 23, 2010. Sterling fell 0.5% to 87.88 pence per euro and weakened 0.8% to 1.4394 versus Australia’s dollar.

South Africa’s current-account shortfall was 6.5% of gross domestic product in the fourth quarter, versus a revised 6.8% in the previous three months, the central bank said. Economists surveyed by Bloomberg predicted it would shrink to 6.3%.

“It is a bit of a shocker for the rand,” said Mohammed Nalla, head of strategic research at Nedbank Group Ltd. in Johannesburg. “The worry is that the previous number was revised upwards. That’s a very large negative.”

The rand slid 0.5% to 9.1382 per dollar after weakening to 9.2122 per dollar, the lowest since April 2009.

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