Yen weakens as G20 applauds BOJ stimulus moves
The yen weakened to nearly 100 per US dollar for the first time since April 2009, after the Group of 20 offered no opposition to the Bank of Japan's monetary stimulus policies.
Japan's currency declined against all its 16 major counterparts after central bank governor Haruhiko Kuroda, who oversees his second policy meeting this week, said he was emboldened to press ahead with a campaign to defeat deflation.
"There's nothing really in our view to stop the yen from continuing to weaken," said Ray Attrill, global co-head of currency strategy at National Australia Bank in Sydney.
"We're having a little bit of tug of war, I think, up close to 100. I've no doubt we'll go through it at some point."
The yen weakened 0.3 per cent to 99.78 per US dollar at 8.28am in London after depreciating to 99.90, the weakest since it reached a four-year low of 99.95 on April 11. G20 finance chiefs and central bankers, who met on Friday, praised this month's measures by the Bank of Japan aimed at delivering 2 per cent inflation within two years.
They signalled that Japan's focus on supporting domestic demand was strong enough to allow them to ignore the side effects on their own economies of a sliding yen.
"Winning international understanding gives me more confidence to conduct monetary policy appropriately," Kuroda said after the meeting. "We will continue our qualitative and quantitative easing for the next two years."
The yen has softened a further 5.6 per cent this month after weakening against the US dollar for the previous six months, the longest losing streak since 2001.
The Bank of Japan is scheduled to deliver its next policy statement in Tokyo on Friday after announcing larger-than-expected stimulus measures at its previous gathering on April 4.
Futures traders increased bets that the yen will weaken against the US dollar, according to figures from the Commodity Futures Trading Commission last week.
The difference in the number of wagers by hedge funds and other large speculators on a decline compared with those on a gain - so-called net shorts - was 93,411 on April 16, compared with 77,697 a week earlier.