Intervention by the Bank of Japan today may not change market fundamentals enough to weaken the yen, according to Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London.
The world’s most accurate foreign- exchange forecasters say the dollar will be the best currency to own this year as the Federal Reserve’s bond purchases bolster the U.S. economy instead of debasing America’s legal tender.
The yen strengthened to a five-week high against the dollar as the partial shutdown of the U.S. government showed no signs of ending, fueling speculation there will be another standoff over raising the debt ceiling.
The dollar will rise to a level against the euro last reached in September as U.S. economic growth picks up and expectations for central bank rate increases elsewhere wane, according to Bank of Tokyo-Mitsubishi UFJ Ltd.
The yen rallied from near its weakest level in almost seven months against the dollar after Bank of Japan Governor Masaaki Shirakawa said the opposition party’s proposals to weaken the currency are unrealistic.