The yen retreated from the strongest in four weeks against the dollar before the Federal Reserve concludes a two-day policy meeting today.
The yen has been the biggest gainer among the 10-currency Bloomberg Correlation-Weighted Indexes in the past week as tumbling oil prices added to concern the global economy will falter, boosting demand for havens. The ruble collapsed to a record yesterday even after Russia increased borrowing costs to the most since 1998. A gauge of emerging-market currencies fell to a 12-year low. New Zealand’s kiwi declined after the South Pacific nation’s current-account deficit widened.
“Looking toward the FOMC, it’s creating a bit of a cross current — the market may be more reluctant to sell the dollar-yen now than it may have been yesterday,” said Greg Gibbs, the head of Asia-Pacific markets strategy at Royal Bank of Scotland Group Plc in Singapore, referring to the Federal Open Market Committee. The greenback “remains basically in a nervous state, caught somewhere between 115 and 119” yen.
The yen dropped 0.3 percent to 116.74 per dollar at 12:05 p.m. in Tokyo from yesterday, when it touched 115.57, the strongest since Nov. 17. Japan’s currency slid 0.2 percent to 145.93 per euro after advancing 1.6 percent in the previous two sessions. The dollar was little changed at $1.2501 per euro.
West Texas Intermediate crude slid as much as 4.1 percent to $53.60 a barrel in New York, the least since May 2009, before trading at $54.70. The United Arab Emirates said the Organization of Petroleum Exporting Countries won’t cut production even if prices fall as low as $40 a barrel.
Source: Bloomberg
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