Sep 27 2013

Japan’s currency dropped against all of its 16 major counterparts as shares rallied on bets the tax cut proposed by Prime Minister Shinzo Abe will make companies more profitable. New Zealand’s dollar strengthened amid speculation the country’s central bank will be the first among developed nations to raise interest rates. The pound diminished against the dollar after a government report showed annual economic growth was less than earlier estimated.

 

The yen weakened for the first time in 5 days against the dollar as speculation Japan’s government will cut corporate taxes spurred stock gains and damped demand for the relative safety of the currency.

 

Andrew Wilkinson, the chief economic strategist at Miller Tabak & Co. in New York, said in a telephone interview “We anticipate further yen weakness over the coming quarters as evidence mounts that Abe’s policy is bearing fruit”. “The yen’s going through a bit of a tussle. It’s been pushed and pulled between its haven status on the back of the Washington debate over the U.S. debt ceiling and potential for further stimulus from the domestic Japanese government.”

 

Enlarge image Yen Coins

 

The yen has dropped 4.3 percent in the past three months, the biggest decline among 10 developed nation currencies tracked by Bloomberg Correlation Weighted Indexes. Photographer: Tomohiro Ohsumi/Bloomberg

 

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