Yen Rallies as BOJ Member Concerned on CPI Goal; Aussie Advances

 The yen gained against most major peers after Bank of Japan board member Takehiro Sato said today risks for prices are tilted to the downside, adding to concern policy makers may struggle to boost inflation to 2 percent.

The euro held a drop versus the greenback from yesterday before a speech in Berlin from European Central Bank Executive Board member Joerg Asmussen, who has said negative deposit rates are a possible tool. Australia’s dollar advanced after a central bank official said the nation shouldn’t be concerned that home prices are increasing. The yen rose for the first time in four days after Sato’s comments were published in minutes of the last central bank meeting.

BOJ officials are “somewhat tentative and cautious,” said Callum Henderson, the global head of currency research at Standard Chartered Plc in Singapore. “Our expectation is for further gradual gains in dollar-yen, but it’ll be a slow grind rather than a dramatic move higher.”

Japan’s currency gained 0.2 percent to 101.44 per dollar as of 9:51 a.m. in Tokyo after reaching 101.92 yesterday, the weakest since May 29. The yen rose 0.2 percent to 137.22 per euro, rebounding from a four-year low. The euro was little changed at $1.3528 from $1.3517 yesterday, when it declined 0.3 percent.

The Bloomberg U.S. Dollar Index, which tracks the currency against 10 major counterparts, slid 0.1 percent to 1,020.23.

The BOJ said in April it wanted to achieve 2 percent inflation in about two years. Central bank board member Sayuri Shirai proposed adding “attention should be paid to the downside risks” to the bank’s outlook report as “there was a high degree of uncertainty regarding developments in overseas economies and households’ employment and income situation,” the BOJ minutes showed.

(Source: Bloomberg)