Yen strengthens on China comments

Story link: Yen strengthens on China comments

The Japanese yen was stronger by midafternoon in New York after the head of China’s central bank was reported to have said that his nation will stop stockpiling foreign exchange reserves, now at over $1,000 billion due mostly to China’s huge trade surplus. Because the yen is not a big part of China’s reserve holdings, it was helped by the announcement. The added 0.3 percent to ¥117.15 versus the US dollar, while it gained 0.4 percent to ¥155.70 in relation to the euro. The yen was, however, 0.5 percent weaker against sterling, to ¥229.25.

Sterling’s strength came as new data showed that UK consumer price inflation was up by 0.4 percent in February, sending the annual rate to 2.8 percent, well above the Bank of England’s 2 percent target rate and a bit higher than the anticipated level of 2.7 percent. Retail price inflation is up as well, to 4.6 percent. All of this data leads analysts to believe that the Bank of England will likely raise interest rates in either April or May. Sterling added 0.7 percent to $1.9585 versus the greenback, while it gained 0.8 percent to £0.6790 against the euro.

The US dollar remained steady in relation to the euro at $1.3295.