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Yen climbs after Amari warning

Bloomberg

The yen climbed versus a majority of its 16 major peers after economy minister Akira Amari said further losses in the currency would negatively affect the people, and the government’s job is to minimize that.

The yen retreated from near its weakest point in more than four years versus the dollar after Amari said Sunday there’s speculation the currency’s past strength has “been corrected a lot.”

Wagers that the dollar will gain against the euro and yen rose last week amid bets the Federal Reserve will signal a tapering of bond purchases. New Zealand’s dollar appreciated as its finance minister said home price gains will pressure the Reserve Bank to raise interest rates.

“The market has been spooked by official suggestions the bulk of the yen depreciation may be behind us,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “Speculative longs in U.S. dollars have crept up to extreme levels and the comments sparked a dash for the exit.” A long position is a bet a currency will rise.

At 5 p.m. in Tokyo, the dollar stood at ¥102.53-53. It touched 103.31 on Friday, the weakest since October 2008.

“It’s being said excessive yen gains have been corrected a lot,” Amari said on NHK. “If the yen extends losses a lot, people’s lives will be negatively affected. It’s our job to minimize that.”

The yen has dropped 20 percent over the past six months, the worst performance among 10 developed nation currencies tracked by Bloomberg Correlation Weighted Indexes. The dollar has gained 3.5 percent and the euro is up 3.8 percent.

More than once, Japanese officials have cautioned against the yen weakening too much, said Rajeev De Mello, who manages more than $8 billion as the Singapore-based head of Asian fixed-income assets at Schroder Investment Management Ltd. “I’m starting to take it a little more seriously,” he said.