Yen up, US dollar down

The Japanese yen was up in morning trade in Europe on Thursday as the governor of the Bank of Japan made comments to a committee of parliament that seemed to imply that the Bank’s loose monetary policy is about to end. This move, when it is made, is expected to allow interest rates in Japan to rise from their current level of zero percent. The gains in the yen came even though some analysts claimed that the Bank’s governor had not really said anything new and that any change in policy could take months to have any practical effect.

The result of all this talk was a gain of ¥1.55 in relation to the US dollar, with the yen trading at ¥116.15. The Japanese currency was up ¥1.25 to ¥139.88 versus the euro, and it gained ¥1.5 to ¥205.07 in relation to sterling.

Meanwhile, some of the emerging market currencies which had seen steep declines in recent days began to stabilize on Thursday. The Icelandic krona gained 1.5 percent versus the US dollar to IKr66.33, while the Brazilian real was up to R$2.13 to the dollar, the Turkish lira sat at TL1.3175 to the dollar, and the Indonesian rupiah was up to Rp9,260 to the dollar.

The Swedish krona, however, fell again, by 5.7 percent to SKr9.4195 to the euro even though the Riksbank raised interest rates by a quarter point to 2 percent.

Elsewhere, the US dollar was weaker for what some analysts called no particular reason, although some pointed to muted data on inflation and anticipation of data on durable goods that is to be released on Friday. The dollar was down 1 cent versus sterling to $1.7532, lost 0.75 centimes to the Swiss Franc to SFr1.3029, and fell half a cent to $1.1961 against the euro.

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