Yen rally on China moves stalls out

China’s central bank increased the band in which the renminbi can rise and fall against the US dollar in a session from 0.3 percent to 0.5 percent on Friday. The move was interpreted by most analysts as in line with Beijing’s stated policy of strengthening its currency slowly. It is seen as being a largely positive move for Asian currencies in general.

The Japanese yen did, indeed, rise 0.4 percent versus the US dollar to ¥120.70 immediately after the People’s Bank of China announced its move, as well as an interest rate hike. The yen also gained on the euro and sterling, up 0.4 percent to ¥162.97 and 0.5 percent to ¥238.29 respectively. By midday in New York, however, the yen was down 0.9 percent on the week to ¥121.23 in relation to the greenback, while the Japanese currency dropped 0.5 percent to ¥163.52 against the euro and fell 0.4 percent to ¥239.19 versus the pound.

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