Yen surges against US dollar, euro, following Bank of Japan comments

The Japanese yen surged against the dollar and the euro on Wednesday after the head of the Bank of Japan said a further slide in the Japanese currency was "unlikely". -- PHOTO: BLOOMBERG
The Japanese yen surged against the dollar and the euro on Wednesday after the head of the Bank of Japan said a further slide in the Japanese currency was "unlikely". -- PHOTO: BLOOMBERG

NEW YORK (AFP) - The Japanese yen surged against the dollar and the euro on Wednesday after the head of the Bank of Japan said a further slide in the Japanese currency was "unlikely".

Mr Haruhiko Kuroda, governor of the Japanese central bank, told a parliamentary committee that the currency has already retreated considerably in the wake of monetary stimulus.

Mr Kuroda also said that a move by the US Federal Reserve to lift interest rates "would not necessarily lead to a cheaper yen". While the yen's sharp decline has been good news for Japanese exporters, it has pushed up the cost of imports and eroded consumers' purchasing power.

Mr Boris Schlossberg, an analyst at BK Asset Management, said Mr Kuroda's remarks "caught the market completely off guard". Mr Kuroda's comments suggest worry about the "potential upheaval" to domestic markets should the currency weaken further, Mr Schlossberg said.

Meanwhile, the dollar dipped against the euro as "a steady ascent in European bond yields to fresh multi-month highs helped underpin" the single currency's gains, said Mr Joe Manimbo, senior market analyst at Western Union Business Solutions.