Bloomberg reports that the yen is poised for its first weekly gain in a month against the dollar after a Japanese government report showed machinery orders rose four times more than expected.
The yen posted its biggest advance in a month versus the dollar and rose against 15 other major currencies tracked by Bloomberg. Faster growth in the world's second-largest economy increases the chances the Bank of Japan will soon end its five- year-old policy of holding interest rates near zero percent to fight deflation.
“Machinery orders jumped massively and that's been a trigger to think we could be near to the end of the BOJ's zero interest-rate policy,'' said Michael Klawitter, a currency strategist at WestLB AG in Duesseldorf, Germany. “That's pushed the yen higher.''
Japan's currency strengthened to 117.65 per dollar at 7:25 a.m. in New York, compared with 118.84 late yesterday and 118.94 a week ago. It's up 0.3 percent against the dollar this year after falling almost 15 percent in 2005. The yen was also at 140.86 per euro, from 142.36 yesterday and 143 last week.
