Yen drops to 3 ½ year low against the euro

Yen drops to 3 ½ year low against the euro.

The yen reached the weakest level in almost four years against the euro, sliding against all 16 of its major peers as the Federal Reserve unexpectedly retained its bond-buying monetary policy.

Japan’s currency slid against all 16 of its major peers after a central-bank policy maker said pressure may mount to expand stimulus. The dollar fluttered against the euro after falling to a seven-month low as Fed policy makers maintained monthly bond purchases at $85 billion. Malaysia’s ringgit surged the most since 1998 and India’s rupee advanced. The pound weakened after an unexpected fall in UK retail sales.

The yen dropped 1.6% to 134.56 per euro in late afternoon trading in New York, after touching the weakest since November 12, 2009. The Japanese currency slid 1.5% to 99.45 per dollar after appreciating to 97.76 yesterday, the strongest level since August 29. The US currency slipped 0.1% to $1.3530 per euro after reaching $1.3569, the weakest since February 7.

The MSCI Asia Pacific Index of shares advanced 1.7%, while the Stoxx Europe 600 Index gained 0.6%. The Standard & Poor’s 500 Index slipped 0.2%.

In the carry trade, investors borrow in low-interest-rate currencies to buy higher-yielding assets. Japan’s benchmark rate is virtually zero.
The Malaysian ringgit climbed 2.4% to 3.1565 per dollar after gaining 2.8%, the biggest intraday advance since September 1998. India’s rupee surged 2.5% to 61.7750 versus the US currency.


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