The yen weakened to an 11-month low against the dollar as U.S. 10-year Treasury yields rose for a seventh day before reports that analysts said will indicate the American economy is gathering momentum.
The yen declined against 13 of 16 major counterparts after Asian stocks advanced for a third day, curbing demand for the lower-yielding Japanese currency. U.S. data today will show initial jobless claims decreased and a regional index of manufacturing improved, according to economist estimates in Bloomberg surveys. Bank of Japan (8301) Governor Masaaki Shirakawa this week indicated the central bank will keep using monetary policy as a tool to tackle deflation.
“As U.S. yields rise so does dollar-yen but I would say over the past few weeks the rises in dollar-yen have outpaced the normal correlation,” said Jane Foley, a senior currency strategist at Rabobank International in London. “The appetite to sell the yen has been persistent for some time. That was triggered not necessarily by Treasuries but by the perception that the Japanese government is pulling out all the stops to stimulate growth, including pressuring the Bank of Japan.”
The yen slid to 84.18 per dollar, the weakest level since April 13, before trading little changed at 83.67 at 9:49 a.m. London time. The U.S. currency was 0.3 percent lower at $1.3066 per euro. It earlier appreciated to $1.3004, the strongest level since Feb. 16. The yen depreciated 0.2 percent to 109.32 per euro.
The 10-year Treasury yield rose three basis points to 2.30 percent.
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