The yen fell by the most since 1995 against its developed-nation counterparts as the Bank of Japan added economic stimulus and signs the eurozone debt crisis was abating damped safety demand.
The 17-nation euro strengthened against the US dollar and the yen during the last quarter after regional leaders agreed on a second bailout for Greece, spurring optimism that the region was recovering from its financial crisis.
“The main driving force behind the yen was the Bank of Japan embarking on a much easier monetary policy,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. “The US labor market has performed a bit better than a lot of people were expecting and some of the data we’ve seen lately has given us a little bit of optimism.”
The yen dropped 10.4 percent over the past three months against the currencies of nine developed-nations, according to Bloomberg Correlation-Weighted Indexes, in the biggest drop since the third quarter of 1995.
The Japanese currency lost 7.8 percent against the US dollar to ￥82.87 and weakened 10.9 percent to ￥110.56 per euro in New York.
Futures traders added to bets last week that the yen would decline against the US dollar, figures from the Washington-based Commodity Futures Trading Commission showed. The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain — so-called net shorts — was 67,622 on Tuesday, compared with net shorts of 25,821 a week earlier.
Mexico’s peso rose the most against the dollar among the 16 major currencies tracked by Bloomberg, adding 8.1 percent to 12.8107 per US dollar. The currency benefited from a stronger economy in the US, its largest trading partner and from higher oil prices. Crude is Mexico’s largest export.
The pound strengthened 0.8 percent this week to US$1.5991 after rising to US$1.6037, the highest level since Nov. 14 last year. The currency stayed above its 200-day moving average of US$1.5851. The UK currency gained 0.3 percent over the five days to ￡0.83.35 per euro.
Sterling has risen 1.4 percent over the past month, the best performer of the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.