The yen strengthened from the lowest level in almost four years against the dollar on speculation its 6.4% slump against the greenback in the past three days was too rapid.
Japan’s currency advanced versus the majority of its 16 most-traded peers after sliding earlier to 99.66 per dollar, the weakest level since May 2009. Australia’s dollar advanced for a second day as monetary stimulus in the U.S. and Japan boosted demand for higher-yielding assets. Thailand’s baht climbed to the strongest since 1997 against the greenback as demand for the nation’s bonds rose.
“It may be a bit of a pause for breath after a pretty large move,” Brian Daingerfield, a currency strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit in Stamford, Connecticut, said in a phone interview. “We still think the trend for a weaker yen should continue. One hundred for dollar-yen looks clearly in sight.”
The Japanese currency gained 0.5% to 98.89 per dollar at 9:35 a.m. in New York after earlier weakening as much as 0.3%. The yen rose 0.1% to 129.15 per euro. The euro strengthened 0.4% to $1.3062.
The most accurate Polish zloty forecasters say a bond rally that drove yields to record lows will peter out as the currency weakens. Poland’s economy, the only one in the European Union to avoid a recession since 2009, will expand 1.2% this year, the slowest pace since 2001, the European Commission forecasts.
The zloty gained 0.3% to 3.1611 per dollar.
Malaysia’s currency gained amid optimism pro-growth policies will gain momentum following national elections due in the coming weeks, attracting global investment. The ringgit rallied 0.7% to 3.0365 to the greenback.
The yen strengthened after its 14-day relative strength index against the greenback dropped to 27 yesterday, below the level of 30 that some traders see as a sign an asset has fallen too quickly.
Bank of Japan officials led by Governor Haruhiko Kuroda said after a policy meeting last week they would boost monthly bond purchases to 7.5 trillion yen ($80 billion) as they set a two-year horizon for their goal of 2% inflation. They suspended a cap on some bond holdings and dropped a limit on debt maturities.