Dollar rises above 100 yen for 1st time in 4 years
Thursday, May 9, 2013
TOKYO (AP) — The dollar rose above 100 yen for the first time in more than four years Friday as currency traders persist in selling the Japanese currency in reaction to Tokyo’s aggressive credit-easing moves.
The dollar rose as high as 101.18 yen early Friday in Tokyo. It was the first time since April 2009 that the greenback has traded above 100 yen.
The yen’s protracted rise has riled some of Japan’s trading partners but generally won support from leaders of other big economies eager to see the world’s second-biggest economy recover from two decades of stagnation. Prime Minister Shinzo Abe has pushed both fiscal and monetary stimulus strategies to help Japan end a long bout of deflation and support domestic demand.
Japan’s monetary easing, and expectations it will help promote inflation, have helped drive the value of the yen down by more than 20 percent against the dollar since October, when it was trading at around 78 yen.
The central bank, under its new governor Haruhiko Kuroda, has vowed to double the monetary base through purchases of government bonds to meet a 2 percent inflation target within the next two years or so.
By joining the U.S. Federal Reserve and other major central banks in flooding the economy with cash, the Bank of Japan hopes to get corporations and consumers to begin spending more and end a long malaise.
A weaker yen helps Japan’s key exporters by boosting foreign earned income when it is repatriated. However, it raises costs in yen terms of the imported crude oil and natural gas resource-scarce Japan must rely on to keep its industries humming and power its cities.
Reviving Japan’s lagging economy has been Abe’s top priority since he took office late last year. His prescribed policy mix, dubbed “Abenomics,” of higher public spending and aggressive monetary easing to end years of deflation and reforms to improve Japan’s competitiveness so far have boosted Japan’s share market and raised hopes for a recovery.
AP Business Writer Elaine Kurtenbach contributed to this report.
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