The yen lost the most against the euro since February amid speculation the Bank of Japan (8301) will add further stimulus next week even as global growth accelerates.
Sterling had its biggest weekly gain versus the dollar in 15 months on bets the Bank of England may refrain from further monetary easing, while Brazil’s real slid as its central bank cut interest rates. The dollar fell against most major peers before the Federal Reserve begins a two-day policy meeting April 24. The euro rose amid stronger-than-forecast German data.
“We are expecting the Bank of Japan to take action next week, and further movements in the yen will depend how aggressive they are,” said Eric Viloria, senior currency strategist at Gain Capital Group LLC in New York. “It’s not going to have the same impact it did when they announced the inflation target and expanded stimulus by 10 trillion yen ($123 billion). Every time a bank takes action you see a diminishing impact on the currency.”
According to Bloomberg, the yen dropped 1.9 percent to 107.79 per euro yesterday in New York in the biggest weekly loss since the five days ended Feb. 24. It touched an almost two-month high of 104.63 on April 16 before tumbling. The Japanese currency fell 0.7 percent versus the dollar, the most in a week since March 16, to 81.52.
Europe’s shared currency strengthened 1.1 percent to $1.3219, from $1.3078 on April 13, in its biggest jump in almost two months. The euro rallied this week after falling below $1.30 on April 16 for the first time since February as Spanish borrowing costs touched a 2012 high, fueling concern Europe’s sovereign-debt crisis was spreading.