The dollar was within 0.1 percent of a six-month high against the yen before U.S. data expected to show stabilization in the housing market.
The euro was 0.4 percent from a three-month high versus Japan’s currency as the Greek government won a second bailout and sent debt-swap and austerity measures to parliament for approval. The U.S. currency gained for a fifth day versus the yen on speculation accelerating economic growth will reduce the case for more quantitative easing from the Federal Reserve. The Bank of Japan increased its asset-purchase fund to 30 trillion yen last week.
“The stronger the U.S. economy, the stronger the sense that the interest-rate story will turn around and some of the strength in the yen relative to the U.S. dollar starts to reverse course,” said Gavin Stacey, a strategist at Barclays Capital in Sydney. “The risk-on tone is seeing some of the yen strength dissipate.”
The dollar was at 79.86 yen as of 10:52 a.m. in Tokyo from 79.74 yesterday. The greenback is poised for its longest series of daily advances since April. It touched 79.89 on Feb. 20, the strongest since Aug. 4. The euro traded at 105.59 yen from 105.54 yesterday, when it touched 106.01, the highest since Nov. 14. The 17-nation currency bought $1.3222 from $1.3234.
In the U.S., sales of previously owned homes probably rose for a fourth month in January, climbing 1.1 percent to a 4.66 million annual rate, the highest level since May 2010, according to the median estimate of economists surveyed by Bloomberg News before the National Association of Realtors releases its data today.
Greek Bailout
Euro-area finance ministers awarded 130 billion euros ($172 billion) in aid to Greece and reached an accord for greater debt relief from investor representatives in an exchange offer to tide the nation past a bond redemption next month.
Greece’s government agreed to fiscal measures, a voluntary debt swap known as private-sector involvement, or PSI, and collective action clauses for bonds. Legislation needed to carry out those measures was submitted to lawmakers and posted on the Greek Parliament’s website.
“We should have a bit of positive sentiment for the euro over the rest of this week as the market still seems a little short,” said Matthew Brady, executive director for foreign exchange at JPMorgan Chase & Co. in Sydney. “We will at some stage this week test $1.34 on the euro just to flush out some of the short positioning.” A short position is a bet an asset will decline in value.
Euro Shorts
Futures traders increased wagers that the euro will decline against the dollar, figures from the Washington-based Commodity Futures Trading Commission showed last week. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain -- so- called net shorts -- was 148,641 on Feb. 14, compared with net shorts of 140,593 a week earlier.
The euro has climbed 0.8 percent in the past week, the second-biggest advance among 10 developed nation peers tracked by Bloomberg Correlation Weighted Indexes. The dollar has weakened 0.5 percent and the yen has dropped 2.5 percent over the same period.
The implied volatility of three-month options for Group of Seven currencies fell as low as 9.97 percent yesterday, the least since Feb. 14, according to the JPMorgan G7 Volatility Index. A decrease makes investments in currencies with higher benchmark lending rates more attractive because it shows the risk is less that market moves will erase profits on such trades.
Japanese Easing
The BOJ on Feb. 14 unexpectedly expanded its asset-purchase program to 30 trillion yen from 20 trillion, with 19 trillion set aside for government bonds. Japan’s central bank also said it will target 1 percent inflation “for the time being.” The nation’s consumer prices fell at a 0.2 percent annual rate in December, government data show.
BOJ Governor Masaaki Shirakawa today told Japanese lawmakers that policy makers set a price target in order to show the central bank’s resolve and that they will continue to make efforts to end deflation.
“Japan has come out and done their own quantitative easing,” said Barclays Capital’s Stacey. “The surprise QE announcement from the central bank in Japan is weighing on recent yen weakness.”
The euro was 0.4 percent from a three-month high versus Japan’s currency as the Greek government won a second bailout and sent debt-swap and austerity measures to parliament for approval. The U.S. currency gained for a fifth day versus the yen on speculation accelerating economic growth will reduce the case for more quantitative easing from the Federal Reserve. The Bank of Japan increased its asset-purchase fund to 30 trillion yen last week.
“The stronger the U.S. economy, the stronger the sense that the interest-rate story will turn around and some of the strength in the yen relative to the U.S. dollar starts to reverse course,” said Gavin Stacey, a strategist at Barclays Capital in Sydney. “The risk-on tone is seeing some of the yen strength dissipate.”
The dollar was at 79.86 yen as of 10:52 a.m. in Tokyo from 79.74 yesterday. The greenback is poised for its longest series of daily advances since April. It touched 79.89 on Feb. 20, the strongest since Aug. 4. The euro traded at 105.59 yen from 105.54 yesterday, when it touched 106.01, the highest since Nov. 14. The 17-nation currency bought $1.3222 from $1.3234.
In the U.S., sales of previously owned homes probably rose for a fourth month in January, climbing 1.1 percent to a 4.66 million annual rate, the highest level since May 2010, according to the median estimate of economists surveyed by Bloomberg News before the National Association of Realtors releases its data today.
Greek Bailout
Euro-area finance ministers awarded 130 billion euros ($172 billion) in aid to Greece and reached an accord for greater debt relief from investor representatives in an exchange offer to tide the nation past a bond redemption next month.
Greece’s government agreed to fiscal measures, a voluntary debt swap known as private-sector involvement, or PSI, and collective action clauses for bonds. Legislation needed to carry out those measures was submitted to lawmakers and posted on the Greek Parliament’s website.
“We should have a bit of positive sentiment for the euro over the rest of this week as the market still seems a little short,” said Matthew Brady, executive director for foreign exchange at JPMorgan Chase & Co. in Sydney. “We will at some stage this week test $1.34 on the euro just to flush out some of the short positioning.” A short position is a bet an asset will decline in value.
Euro Shorts
Futures traders increased wagers that the euro will decline against the dollar, figures from the Washington-based Commodity Futures Trading Commission showed last week. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain -- so- called net shorts -- was 148,641 on Feb. 14, compared with net shorts of 140,593 a week earlier.
The euro has climbed 0.8 percent in the past week, the second-biggest advance among 10 developed nation peers tracked by Bloomberg Correlation Weighted Indexes. The dollar has weakened 0.5 percent and the yen has dropped 2.5 percent over the same period.
The implied volatility of three-month options for Group of Seven currencies fell as low as 9.97 percent yesterday, the least since Feb. 14, according to the JPMorgan G7 Volatility Index. A decrease makes investments in currencies with higher benchmark lending rates more attractive because it shows the risk is less that market moves will erase profits on such trades.
Japanese Easing
The BOJ on Feb. 14 unexpectedly expanded its asset-purchase program to 30 trillion yen from 20 trillion, with 19 trillion set aside for government bonds. Japan’s central bank also said it will target 1 percent inflation “for the time being.” The nation’s consumer prices fell at a 0.2 percent annual rate in December, government data show.
BOJ Governor Masaaki Shirakawa today told Japanese lawmakers that policy makers set a price target in order to show the central bank’s resolve and that they will continue to make efforts to end deflation.
“Japan has come out and done their own quantitative easing,” said Barclays Capital’s Stacey. “The surprise QE announcement from the central bank in Japan is weighing on recent yen weakness.”
