Yen falls to lowest level in 2½ years

Kyodo, Bloomberg

The dollar briefly topped the ¥90 line Friday morning in Tokyo for the first time in more than 2½ years and the Nikkei 225 average climbed nearly 3 percent to a 32-month high as expectations strengthened that the Bank of Japan will implement drastic monetary easing and remarks by Japanese officials showed support for a weaker yen.

At noon, the dollar was trading at ¥89.82-83 compared with ¥89.80-90 in New York and ¥88.60-61 in Tokyo at 5 p.m. Thursday. After briefly rising to ¥90.14 in New York overnight, the U.S. currency’s highest level versus the yen since June 2010, it eventually settled around the upper ¥89 level as some traders looked for fresh cues to test higher ground, dealers said.

The Nikkei average gained 303.66 points, or 2.86 percent, from Thursday to close at 10,913.30, the highest level in two years and nine months. The broader Topix of all first section issues was up 20.98 points, or 2.36 percent, at 911.44.

Minori Uchida, head of global market research at Bank of Tokyo-Mitsubishi UFJ, said speculation is mounting that the BOJ will implement further monetary easing at its Policy Board meeting from Monday.

On Thursday, the American Automotive Policy Council, which represents Ford Motor Co., General Motors Co. and Chrysler LLC, issued a statement urging U.S. President Barack Obama to tell the new Liberal Democratic Party-led government in Tokyo that Washington will retaliate over policies aimed at weakening the yen.

The LDP, which reclaimed power following last month’s election, has let the yen continue its slide against the dollar, making U.S. auto exports relatively expensive, the council’s statement said.

“We urge the Obama administration to make it clear to Japan that such policies are unacceptable and will be met by reciprocal measures,” Matt Blunt, a former Republican governor of Missouri and president of the Washington-based industry group, said in the statement.

U.S. automakers have said the undervalued yen distorts trade and stunts job growth for American manufacturers.