BLBG: Yen Strengthens as BOJ Says It Will End Emergency Bond Buying
By Lukanyo Mnyanda and Ye Xie
Oct. 30 (Bloomberg) -- The yen rose against the dollar and euro after the Bank of Japan said it will stop buying corporate debt at the end of the year, reducing concern that it’s flooding the market with Japan’s currency.
The Swiss franc weakened against the euro on speculation the central bank sold its own currency to limit its appreciation and bolster the economic recovery. The dollar headed for a fourth monthly loss against the euro in the longest stretch of declines since 2004.
“There’s been a degree of yen buying after the BOJ’s decision to end some of its support measures,” said Lee Hardman, a foreign-exchange strategist in London at Bank of Tokyo-Mitsubishi UFJ Ltd.
The yen advanced 0.3 percent to 91.14 per dollar at 7:55 a.m. in New York, from 91.41 yesterday. Japan’s currency strengthened 0.5 percent to 134.91 per euro, from 135.51. The dollar advanced 0.1 percent to $1.4807 per euro, from $1.4822.
The BOJ decided to end purchases of commercial paper and corporate bonds from lenders as scheduled, while extending unlimited collateral-backed lending through March 31, according to a statement released in Tokyo today. Policy makers kept the benchmark interest rate unchanged at 0.1 percent.
“The BOJ decision to end corporate bond purchases has obviously has had an impact,” said Chris Furness, head of foreign-exchange strategy in London at 4Cast Ltd., a research company that counts central banks among its subscribers. “It shouldn’t have surprised anyone because it’s on schedule, but at the same time I can see that it would have an impact.”
