The yen dropped the most in more than two weeks against the dollar as risk appetite swelled amid reports that showed U.S. industrial production rose and China’s economic growth slowed less than forecast, damping haven demand.
Japan’s government will cut its economic assessment for the first time in almost a year and a half, reflecting concern about the blow to consumption from this month’s sales-tax increase, the Nikkei newspaper reports.
Confidence in Prime Minister Shinzo Abe’s stimulus policies is faltering after foreign investors sold $24.2 billion of Japanese shares this year, leaving them the cheapest relative to bonds in 18 months.
Prime Minister Shinzo Abe’s bid to vault Japan out of 15 years of deflation risks losing public support by spurring too much inflation too quickly as companies add extra price increases to this month’s sales-tax bump.
The dollar fell to the weakest level in more than five months versus a basket of peers after several Federal Reserve policy makers said projections for an interest- rate rise were overstated in minutes from its last meeting.