Dollar continues slide vs yen as global stocks drop
By Chuck Mikolajczak
NEW YORK (Reuters) - The dollar continued to slump against the yen on Thursday expectations the Bank of Japan was unlikely to intervene with more policy measures, while global growth concerns knocked down equities.
Investors were set to monitor an appearance by Janet Yellen at 5:30 p.m. EDT in a conversation with former U.S. Federal Reserve chairmen for any clues of when the Fed may hike rates again. On Wednesday, minutes from the most recent meeting indicated the central bank is unlikely to raise interest rates before June, as a number of policymakers argued headwinds to growth would probably persist.
A cautious Fed and concerns about global growth sent the dollar to a 17-month low of 107.67 against the yen JPY=. An optimistic economic outlook from the BOJ also diminished expectations the central bank would take additional monetary easing steps.
The dollar was last down 1.2 percent against the yen at 108.44, its biggest daily percentage drop in two months. The decline put the greenback's losses against the yen at nearly 10 percent for the year.
"What (investors) are seeing now is that (Japanese) policymakers aren’t providing the support for dollar/yen that they would have expected," said Shahab Jalinoos, global head of FX strategy at Credit Suisse in New York.
"That’s creating some degree of confusion, and of course, prudent risk management suggests one scales back on short positions."
The surge of money into the perceived safety of the Japanese currency reflects the scale of concern over global growth that has kept Fed rate hikes in check.
That concern also sent equities lower, with each of the 10 major sectors on Wall Street in the red, while the pan-European FTSEurofirst 300 share index .FTEU3 was on track for its fourth straight week of declines. Continued...