The rand gained for a sixth day as monetary easing from Japan to the U.S. sparked demand for high- yielding assets including South African bonds.
The currency of Africa’s largest economy advanced as much as 0.2 percent to 8.9051 per dollar, the best intraday level since Feb. 28. It traded at 8.9138 per dollar by 11:36 a.m. in Johannesburg. Yields on benchmark 10.5 percent government bonds due December 2026 dropped five basis points, or 0.05 percentage point, to 6.99 percent.
Monetary easing by developed nations is driving yields from Poland to Mexico lower as investors seek greater returns in countries such as South Africa, which has the third highest 10- year rates of emerging markets in Eastern Europe and Africa. Foreign investors bought a net 1.6 billion rand ($180 million) of South African bonds yesterday after purchases of 1.9 billion rand a day earlier and 5.4 billion rand last week, the most since November, according to JSE Ltd. data.
“The risk-on rally continues,” John Cairns, a strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “The key global themes remain the same: a weakening dollar after last week’s payrolls number and a renewed search for yield. Risk assets are performing very well in this environment.”
Federal Reserve Chairman Chairman Ben S. Bernanke may push on with $85 billion in monthly bond purchases through the northern-hemisphere summer as sluggish jobs data adds to evidence of slower growth. The Bank of Japan (8301) said last week it will buy more longer-term government bonds than forecast as part of its asset-purchase program. European Central Bank President Mario Draghi also said monetary policy will remain accommodative, while the Bank of England said it will continue buying assets.
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