Yen Declines as Obama Voices ‘Strongest Support’ for Bernanke

Jan. 26 (Bloomberg) -- The yen fell against all major counterparts as U.S. President Barack Obama said Federal Reserve Chairman Ben S. Bernanke “has my strongest support” for a second term, boosting demand for higher-yielding currencies.

The dollar may drop on prospects the Fed will keep its target lending rate near zero to sustain an economic recovery in the world’s largest economy. The Bank of Japan is forecast to keep interest rates on hold when it completes its two-day policy meeting today. The pound rose before a U.K. report that may show the British economy grew for the first time since the first quarter of 2008.

“There’s no reason for the yen to rise right now,” said Koji Fukaya, a senior currency strategist in Tokyo at Deutsche Bank AG. “I’m not concerned much about the global economic recovery. I don’t think the Obama administration will do anything to disrupt the economy.”

The yen declined to 128.13 per euro as of 9:27 a.m. in Tokyo from 127.75 in New York yesterday. Japan’s currency weakened to 90.46 per dollar from 90.28. It touched 89.79 on Jan. 22, its strongest level since Dec. 18. The dollar traded at $1.4164 per euro from $1.4151. It appreciated to $1.4029 on Jan. 21, its strongest level since July.

Obama said in an interview with ABC News that Bernanke is the right person for the job.

“What we need is somebody at the Federal Reserve to make sure the progress we’ve made in stabilizing the economy continues,” he said in the interview broadcast yesterday.