Yen climbs on BOJ rate speculation, Asian stock drop
The Japanese yen rose to a two-week high against the dollar after a report showed demand for services unexpectedly rose in February.
By PTI |
Tokyo: The yen climbed on speculation that Bank of Japan will raise interest rates and as Asian stocks slumped, prompting traders to reduce investments in higher-yielding assets funded by borrowing the currency.
The Japanese yen rose to a two-week high against the dollar after a report showed demand for services unexpectedly rose in February. The Australia and New Zealand dollars fell as a drop in Chinese stocks caused traders to reduce so-called carry trades, as they did following a similar decline in global equities on Feb. 27.
A steep fall in Chinese stock prices was suggestive of global risk reduction in February. That could lead to the unwinding of yen carry trades again.
The yen rose to 117.91 per dollar in Tokyo, a strongest since April 3, compared with 118.68 in New York yesterday. It climbed to 160.27 per euro from 161.51 yesterday and a record low of 162.43 on April 16.
Chinese stocks declined on speculation gross domestic product due later today will exceed expectations, prompting the People's Bank of China to raise interest rates.
That reminded traders of the Japanese currency's surge to a three-month high against the dollar and a four-month peak versus the euro after sharp declines in Chinese stocks on Feb. 27.
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