The yen resumed its historic decline as finance ministers from the world’s developed nations avoided criticizing Japan for allowing the weakening of the currency to gain an unfair competitive advantage in trade.
The Japanese currency fell as G20 officials debated adopting a tougher stance on exchange rates as they prepared to reiterate a pledge against devaluations. The yen has tumbled about 7 percent versus the US dollar this year as Japanese Prime Minister Shinzo Abe seeks more aggressive monetary policy, including the nomination of a new Bank of Japan (BOJ) governor.
Britain’s pound depreciated as retail sales unexpectedly fell last month.
“The G20 didn’t really single out Japan, which gives policymakers in Japan the green light to continue the expansionary fiscal and monetary policies,” Omer Esiner, chief market analyst in Washington at the currency brokerage Commonwealth Foreign Exchange Inc, said yesterday in a telephone interview. “All indications are that we’re likely to get someone at the BOJ like-minded to Japan’s prime minister, and that the BOJ will continue to ease monetary policy.”
The yen fell 0.9 percent to ￥93.50 per US dollar this week in New York and reached ￥94.46 on Monday, the weakest level since May 2010.
The Japanese currency fell 0.9 percent to ￥124.96 per euro. The shared currency was little changed at US$1.3360 after falling yesterday to US$1.3306, its lowest level since Jan. 24.
A 0.1 percent advance by the yen last week against the greenback ended 12 straight weeks of losses, the longest stretch in records compiled by Bloomberg dating to 1971.
The Swedish krona was the biggest winner among the US currency’s 16 most-traded counterparts this week, and Britain’s pound dropped the most.
New Zealand’s dollar rose, while Canada’s dollar fell for a second week.
The yen has been the worst performer this year among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes, depreciating 7.4 percent. The euro gained 2.1 percent, and the US dollar rose 0.7 percent.
The pound had its steepest weekly drop against the dollar since June after UK retail sales decreased last month for a second month, adding to evidence the economic recovery is faltering.
“The data from the UK has disappointed once again,” Ian Stannard, London-based head of European foreign-exchange strategy at Morgan Stanley, told reporters on Friday. “Sterling can go quite a bit lower from here. Sterling will be one of the underperformers.”
The pound fell 1.8 percent to US$1.5518. It depreciated 1.8 percent to ￡0.8609 per euro.
Sweden’s krona touched a four-month high against the euro on Thursday, a day after the Riksbank refrained from monetary easing to weaken the currency.
It climbed to 8.4282 and ended the week at 8.4477, up 2 percent.