Bloomberg: Yen May Advance on Speculation Report Will Show Japan’s Deflation to End

Nov. 25 (Bloomberg) — The yen may rise against the dollar
on speculation a government report will show core consumer
prices stopped falling in October for the first month in five,
signaling deflation is nearing an end.

Japan’s currency is poised for a second weekly gain in
three versus

the dollar. The report may fuel speculation the
Bank of Japan next year will scrap the policy of pumping cash
into the economy and holding interest rates near zero. The
interest-rate gap between the U.S. and Japan has helped the
dollar strengthen almost 16 percent versus the yen this year.

The figure “could be positive for the yen,” said Tomoko
Fujii, a currency strategist at Bank of America in Tokyo. “That
may make it easier to draw attention to the prospects for an end
to the easy monetary policy.”

Against the dollar, the yen traded at 118.95 at 8:04 a.m.
in Tokyo, from 118.92 yesterday, according to EBS, an electronic
currency dealing system. U.S. financial markets were closed
yesterday for the Thanksgiving holiday.

Nationwide core consumer prices excluding fresh food, which
the central bank monitors to make policy, were unchanged in
October after falling 0.1 percent in September, according to the
median forecast of 32 economists surveyed by Bloomberg News. The
report will be released at 8:30 a.m. in Tokyo.

The Federal Reserve has raised its benchmark rate between
banks 12 times since June 2004, to 4 percent. Japan’s central
bank has kept rates near zero since March 2001.

The dollar traded at 1.1779 against the euro from 1.1789
yesterday, according to EBS.

Popularity: 1%