Bank of Japan Governor Masaaki Shirakawa, who set the nation’s first inflation goal six months ago to halt a decade-long struggle with deflation, has failed to produce the weaker currency craved by exporters.
The Bank of Japan expanded its asset-purchase program for the third time in four months, and will reconsider its objectives for inflation as incoming Prime Minister Shinzo Abe urges more action to end price declines.
Japan’s biggest corporations are weakening the yen through record takeovers of everything from a U.S. phone company to a Swiss drugmaker, after central bank Governor Masaaki Shirakawa’s attempts to halt the currency’s rise proved fleeting.
Masafumi Yamamoto , chief currency strategist at Barclays Plc in Tokyo, comments on the impact on the yen of China’s announcement that it will allow more currency flexibility. The statement signals an end to the yuan’s two- year-old peg to the dollar a week before a Group of 20 summit.
The Australian and New Zealand dollars fell, paring weekly gains, as investors’ risk appetite cooled on speculation China may takes steps to cool its economy after reports showed inflation accelerated.
Japanese policy makers for a third straight day signaled that a stronger yen poses a danger to growth in the world’s second-largest economy, spurring speculation they will take steps to counter that risk.