Wednesday, March 17, 2010

Yen, Dollar Weaken on Central Bank Outlook, Gain in Asia Stocks

March 17 (Bloomberg) -- The yen and dollar weakened on speculation the U.S. and Japan will maintain economic policy stimulus and after stocks and commodity prices rose, boosting demand for riskier assets.

The Canadian dollar touched it strongest in almost two years versus the greenback as prices for oil, one of the nation’s biggest exports, climbed for a second day. The yen fell against 14 of the 16 most-traded currencies on prospects Bank of Japan Governor Masaaki Shirakawa will ease credit just as his counterparts across Asia move to withdraw liquidity following the global recession.

“The major central banks look like they will continue to be committed to keeping policy stimulus in pace,” said Mitul Kotecha, head of global foreign-exchange strategy for Credit Agricole CIB in Hong Kong. “If the Bank of Japan does act today, it may play negatively for the yen.”

The yen weakened to 124.54 per euro as of 9:54 a.m. in Tokyo after falling 0.4 percent yesterday to 124.31 in New York. The euro bought $1.3764, little changed from yesterday when it advanced 0.7 percent. The Japanese currency slipped to 90.42 per U.S. dollar from 90.31 yesterday, when it reached 89.99, the strongest since March 10.

The Bank of Japan is scheduled to announce its policy decision after a two-day meeting by early afternoon in Tokyo. Shirakawa will speak at a press conference at 3:30 p.m. local time.

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