Posted at 1:30 p.m., Monday, December 18, 2006
Yen hovers near one-month low against the dollar
Bloomberg News Service
NEW YORK — The yen was little changed near a one-month low today against the dollar on speculation the Bank of Japan will hold off on raising interest rates until at least next quarter.Investors have trimmed bets the BOJ will raise rates for a second time this year after a report showed the economy slowed in the third quarter. About 80 percent of analysts surveyed by Bloomberg News forecast the central bank will keep its benchmark rate at 0.25 percent at a meeting that ends today.
"The market has discounted a rate hike in December," said John McCarthy, director of currency trading at ING Financial Markets LLC in New York. "The yen will continue to be under pressure if there is a lack of indication from the BOJ about further rate hikes next quarter."
The Japanese currency traded at 118.15 per dollar at 7 a.m. in Tokyo, falling from as strong as 117.71 in New York yesterday. It touched 118.33 per dollar last week, the weakest since Nov. 17. It also traded at 154.74 per euro, less than one yen from its record low of 155.58 yen on Dec. 14.
BOJ policy makers will keep their key rate at 0.25 percent when they end their meeting today, according to 41 of 52 economists surveyed by Bloomberg News. The median forecast in a Bloomberg survey as of Dec. 18 is that the bank will lift its benchmark to 0.5 percent next month.
