Yen Gain As Japan’s Second-Largest Lender Warning of 110 Breach

The yen’s climb this month has Japan’s second-biggest lender saying it could strengthen past 110 per dollar for the first time since Bank of Japan Governor Haruhiko Kuroda expanded easing in 2014.

Japan’s currency has advanced against its 31 major peers in February as sliding prices for equities and commodities drove investors to haven assets. Month-end buying and the prospect that Japanese policy makers will be sidelined on intervention by this week’s Group-of-20 gathering may add to yen strength, said Masato Yanagiya, head of foreign-exchange and money trading at Sumitomo Mitsui Banking Corp. in New York. Dollar bulls, stung by a 7.7 percent slide in the greenback since Jan. 29, will be looking to a speech by Federal Reserve Vice Chairman Stanley Fischer for guidance on the outlook for policy.

“We need to be wary of dollar-yen breaking below 110 this week,” said Yanagiya. “The yen bears are gone.”

The yen advanced 0.3 percent to 111.81 per dollar as of 9:07 a.m. in Tokyo, following a 0.7 percent gain Tuesday. It reached 110.99 on Feb. 11, the most since Oct. 31, 2014. Japan’s currency advanced 0.2 percent against the euro to 123.29 and climbed 0.4 percent versus the Australian dollar to 80.46.

The yen has been the chief beneficiary of a wave of risk aversion that’s swept through markets this year amid concern that a slowdown in China will damp growth around the world. Jitters about China’s exchange-rate management were revived on Tuesday after the nation cut its daily yuan fixing by the most in six weeks, surprising investors who’d anticipated little movement before the G-20 meeting.

Bloomberg