The yen tumbled the most in 17 months against the dollar after the Bank of Japan (8301)outstripped forecasts and announced unprecedented economic stimulus measures that tend to devalue the currency.
The euro rose versus the dollar after the European Central Bank held interest rates steady and ECB President Mario Draghi said policy makers are “ready to act” if the region’s economy declines further. The pound gained as the Bank of England refrained from boosting asset purchases. The yen slid at least 2.7 percent versus all of its 16 most-traded peers as BOJ Governor Haruhiko Kuroda doubled monthly bond buying.
“Expectations were high, and Kuroda managed to meet and beat them in every sort of dimension,” Richard Franulovich, a senior currency strategist at Westpac Banking Corp. (WBC) inNew York, said in a telephone interview. “It’s a pretty radical step. It’s flooding the system with liquidity and excess reserves, which is a negative for the currency.”
The yen tumbled 3.2 percent to 96.12 per dollar at 2:57 p.m. in New York, the biggest one-day drop since Oct. 31, 2011, whenJapan intervened in foreign-exchange markets to weaken its currency. The yen slumped 4.1 percent to 124.38 per euro and touched 124.58, the weakest level since March 15. The shared currency gained 0.7 percent to $1.2943 after sliding 0.8 percent earlier to $1.2746, the lowest since Nov. 21.
The Japanese currency fell to the weakest level againstAustralia’s dollar since August 2008, sinking as much as 3.3 percent to 100.59 yen. The Aussie fell 0.2 percent against the greenback to $1.0436.
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