Yen ends drop as bullish bets reach 4-year high

Tokyo - The yen advanced, halting a two-day decline, after Bank of Japan (BoJ) Governor Haruhiko Kuroda showed little appetite for an immediate expansion of stimulus before the central bank sets policy this week.

Kuroda said in an interview on January 22 in Davos, Switzerland, that “at this stage, we don’t think the current market situation has been affecting corporate behavior unduly.”

Japan’s currency has gained versus all its 16 major counterparts since the start of the year as a China-led stock selloff and a tumble in oil prices spurred demand for haven assets. Hedge funds and other large speculators raised net bullish yen positions to the highest in almost four years last week.

“The Bank of Japan is so far from hitting 2% inflation,” Sean Callow, a foreign-exchange strategist in Sydney at Westpac Banking, said in an interview on Bloomberg Radio. “Risks are probably growing for action, but I’d say probably not this week.”

The BOJ is scheduled to announce its latest monetary policy decision on January 29.

The yen strengthened 0.2% to 118.54 per dollar as of 09:56, extending its gain this year to 1.4%. It was little changed at 128.21 per euro.