Bloomberg: Dollar Climbs Against Yen on Speculation Report Will Add to Fed Rate View

by Trader Rich

Nov. 21 (Bloomberg) — The dollar rose against the yen in
Asia on speculation an industry report will show a strengthening
economy and add to expectations the Federal Reserve will keep
raising interest rates.

The Fed has lifted rates seven times this year, while the
Bank of Japan faces

government pressure to keep interest rates
near zero percent. A report today will probably show an index of
U.S. leading economic indicators rose in October for the first
time in four months.

“Any stronger U.S. economic data will surely reinforce
expectations over the Fed’s further interest-rate hikes, ” said
Hidehiko Inamura, director of foreign exchange in Tokyo at
Citigroup Inc. “The index of leading economic indicators could be
used as a fresh incentive to push up the dollar.”

The U.S. currency rose to 119.31 yen as of 3:40 p.m. in Tokyo,
from 119.10 in New York on Nov. 18, according to the electronic
foreign-exchange dealing system EBS. The U.S. currency traded
unchanged at $1.1777 versus the euro, after earlier weakening as
far as $1.1784.

The dollar will move between 118.75 yen and 120 yen and $1.17
and $1.18 versus the euro today, Inamura said.

The New York-based Conference Board may say its index of
leading indicators, designed to signal how the economy will
perform over the next three to six months, rose 0.8 percent last
month, after a 0.7 percent drop in September, the median forecast
of 38 economists in a Bloomberg survey showed.

Japanese Prime Minister Junichiro Koizumi on Nov. 14 said
it’s “too early” for the Bank of Japan to change its policy. The
dollar has risen about 16 percent versus the yen this year. The
timing of any shift is “something the Bank of Japan will judge,”
Koizumi told reporters at the Asia-Pacific Economic Cooperation
forum in Busan, South Korea on Nov. 18.

St. Louis Fed Bank President William Poole said Nov. 17
policy makers should be cautious before halting a run of seven
rate increases this year as pressure on prices to rise remains.

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