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FOREX-Yen slides to 4-year low as U.S. data lifts dollar
May 10, 2013 / 9:12 AM / 5 years ago

FOREX-Yen slides to 4-year low as U.S. data lifts dollar

* Dollar jumps to four-year high well above 100 yen

* Nears Oct. 2008 high of 101.45 yen, some say 105 possible

* Euro hits more than 3-year high versus yen

* Safe-haven Swiss franc falls, Aussie hits 10-month low

By Jessica Mortimer

LONDON, May 10 (Reuters) - The yen slid to a four-year low against the dollar on Friday after better U.S. data sparked talk the Federal Reserve may scale back monetary easing and signs emerged that Japanese investors were buying more foreign assets.

The dollar jumped beyond the psychologically and technically significant 100 yen level, which has formed stiff resistance in recent weeks, prompting traders and analysts to predict more yen falls, possibly towards 105 yen per dollar.

The yen has lost nearly 9 percent against the U.S. currency since the Bank of Japan announced aggressive monetary easing on April 4 and is down around 15 percent so far this year.

The yen fell 0.8 percent to 101.40 yen on the EBS trading platform, its weakest since April 2009 and just shy of the October 2008 low of 101.45 yen.

Lee Hardman, currency economist at BTMU, said there was little chart resistance between 101.45 yen and 105 yen.

“The bigger move is one of broad dollar strength on the back of heightened expectations that the Fed could taper its asset purchasing programme before year-end,” he said, adding that the breach of 100 yen encouraged yen selling.

G7 officials were expected to reiterate that monetary policy tools aimed at boosting a domestic economy were acceptable even if they had a side-effect of weakening a currency. Analysts said that could be seen as a green light to further yen selling.

The dollar was spurred higher on Thursday after a drop in U.S. weekly jobless claims eased concerns about the U.S. outlook and as Federal Reserve officials renewed a debate about scaling back asset purchases.

Yen falls accelerated after data showed Japanese investors bought a net $5.2 billion of foreign bonds in the past two weeks, suggesting the BOJ’s radical easing policies are pushing them to seek higher yields abroad.

“Even if people pared back their expectations of higher inflation and of Japanese investors moving overseas, the dollar is not likely to fall now,” said Junya Tanase, executive director of FX research as JPMorgan.

The yen also fell 0.6 percent to a three-year low against the euro of 132.16 yen.

The euro fell 0.1 percent to $1.3029. The dollar hit a two-week high against a basket of currencies of 82.68.


The steep drop in the yen and recent ebbing euro zone debt worries encouraged broad selling of safe-haven currencies, pushing the Swiss franc broadly lower. Talk of further policy easing by the Swiss National Bank also weighed on the franc.

The dollar hit a six-week high of 0.9571 Swiss francs EBS, while the euro rose to a 3 1/2-month peak of 1.2444 francs.

The Australian dollar, which has been under pressure recently due to concerns about a slowdown in China and the prospect of more central bank interest rate cuts, fell to a 10-month low against the U.S. dollar of $1.0037.

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