By Kosaku Narioka
The yen fell to multi-month lows against other major currencies on Friday in Asia on continued expectations for U.S. reflationary policies and weaker demand for the safe-haven yen as Japan's stock benchmark hit a new ten-month high.
Speculation has increased for U.S. fiscal stimulus, higher inflation and faster Federal Reserve rate increases after the election of Donald Trump as the next U.S. president earlier this month.
The Bank of Japan's new policy framework of limiting bond yield gains is helping increase the prospects of greater interest rate differential between the U.S. and Japan. Dollar-denominated, higher-yielding assets tend toattract more investments.
"The dollar/yen is an easy choice" to bet for the dollar's ascent, said Seiichi Tanaka, head of FX spot trading at Mizuho Bank.
A stronger performance of the Japanese stock market is also helping to reduce the demand for safe-haven assets such as the yen, market participants said. The benchmark Nikkei Stock Average's intraday high was the highest since Jan. 5.
The dollar was at 113.58 yen as of 0350 GMT after hitting as high as Y113.90, the highest since March 15, according to EBS. The dollar was at Y113.33 late Thursday.
The British pound was at Y141.46 after advancing to Y141.76, the highest since July 21. The sterling was at Y141.11 late Thursday.
The euro was at Y120.07 after hitting Y120.15, the highest level since June 24. The euro was at Y119.58 late Thursday.
Despite the dollar's recent broad strength, some market participants are reluctant to sell the euro further against the dollar because the European Central Bank could start slowing its bond purchases program, which would support the euro.
The euro could target the parity against the dollar if ECB continues its big bond buying program, Mr. Tanaka said. The euro was at $1.0573, compared with $1.0550 late Thursday.
Interbank Foreign Exchange Rates At 22:50 EST / 0350 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 113.58-59 113.33-34 +0.22 113.90 113.21 -5.58
EUR/USD Euro 1.0573-76 1.0552-55 +0.20 1.0577 1.0539 -2.63
GBP/USD U.K. 1.2457-59 1.2450-52 +0.06 1.2458 1.2430 -15.46
USD/CHF Switzerland 1.0158-62 1.0164-68 -0.06 1.0189 1.0156 +1.40
USD/CAD Canada 1.3482-87 1.3490-95 -0.06 1.3516 1.3482 -2.56
AUD/USD Australia 0.7427-310.7406-10 +0.28 0.7435 0.7400 +1.95
NZD/USD New Zealand 0.7011-17 0.6998-7004 +0.19 0.7017 0.6984 +2.65
EUR/JPY Japan 120.08-12 119.57-61 +0.43 120.18 119.52 -8.17
Source: ICAP PLC
Write to Kosaku Narioka at email@example.com
(END) Dow Jones Newswires
November 24, 2016 23:26 ET (04:26 GMT)
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