Dollar Trades Near Strongest Versus Yen Since February on Rates
June 18 (Bloomberg) -- The dollar traded near a four-month high against the yen on bets the Federal Reserve will increase borrowing costs later this year while the Bank of Japan holds its target at the lowest level among major economies.
Japan's currency weakened as Bank of Japan's policy meeting minutes from May indicated ``considerable downside risks.'' China's yuan advanced to the strongest since a dollar link ended in 2005 as the central bank's Governor Zhou Xiaochuan said the currency ``will have to rise'' because a weakening dollar will drive up commodity prices.
``There's still some room for the yen to weaken,'' said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. ``The Fed is done easing. There's no interest-rate hike in the cards from the Bank of Japan.''
The dollar traded at 107.95 yen at 10:45 a.m. in New York, compared with 107.93 yesterday. It touched 108.58 on June 16, the strongest level since Feb. 14. Gladstein expects the dollar to rise as much as 110.50 yen. The yen was little changed at 167.31 per euro, compared with 167.41, after earlier touching 168.04, the highest since July 23. The dollar traded at $1.5497 per euro, compared with $1.5511.
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