Yen weakens past 100 per dollar for first time in four years

Number Anticipation

“This report will be watched closely for evidence of increased buying of foreign securities by Japanese investors,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, said in a telephone interview. “The anticipation of the number could have something to do with the move.”

The BOJ increased monthly bond purchases on April 4 to exceed 7 trillion yen ($700 billion) at Kuroda’s first policy meeting in charge, exceeding the 5.2 trillion yen forecast by economists in a Bloomberg News survey. It also suspended a cap on some bond holdings and dropped a limit on debt maturities.

Policy makers maintained the unprecedented plan at an April 26 meeting and predicted inflation will almost match their target in two years even after a report highlighted deflation’s grip.

Kuroda told reporters after the second April meeting that policy adjustments would be made if necessary and the bank will keep its stimulus until stable 2% gains in consumer prices are realized.

Jobless Claims

“We’re opening up the door to look at 105 in the next few months, and 110 by end of year seems perfectly reasonable,” Alan Ruskin, global head of Group of 10 foreign-exchange strategy in New York at Deutsche Bank AG, the biggest currency trader in a Euromoney Institutional Investor Plc poll, said in a telephone interview.

The yen erased an earlier advance versus the dollar after U.S. applications for unemployment insurance payments decreased by 4,000 to 323,000 in the week ended May 4, the least since January 2008, Labor Department figures showed today. Economists forecast 335,000 claims, according to the median estimate in a Bloomberg survey. The average over the past month was the lowest since before the last recession began.

Dollar-yen was the most active trading pair as over-the- counter foreign-exchange options totaled $28 billion today, matching yesterday’s turnover, according to data reported by U.S. banks to the Depository Trust Clearing Corp. and tracked by Bloomberg.

Trading Volume

Volume in options on the dollar-yen exchange rate amounted to $8.8 billion, the largest share of trades at 31%. Dollar-yuan options were the second most-actively traded, at $3.2 billion, or 11%.

Dollar-yen options trading was 33% less than the average of the past five Thursdays at a similar time in the day, and yuan trading rose 57%, according to Bloomberg analysis.

The pound advanced versus the euro as the Office for National Statistics said Britain’s industrial output rose 0.7% in March. Economists surveyed by Bloomberg forecast a gain of 0.2%. The U.K.’s gross domestic product increased 0.8% this quarter through April, according to NIESR estimates.

The BOE’s Monetary Policy Committee kept its bond-purchase target at 375 billion pounds ($583 billion) at the end of a two- day meeting in London, as forecast by all except one of 44 economists surveyed by Bloomberg. The majority on the nine- member MPC said last month that monetary policy was already “highly stimulatory,” according to minutes of the April 3-4 meeting released April 17.

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