Tradervox.com (Dublin) – The Aussie climbed against the yen to its strongest level in 19 months after Japan’s opposition leader Shinzo Abe won the lower parliament election held yesterday. The party leadership has expressed its desire to adopt further easing measures. The New Zealand dollar increased to its highest in four years as pressure mounted on the Bank of Japan to expand its asset-purchases program. The central bank policymakers are meeting this week to discuss the issue. The Australian dollar, however, declined against the US dollar prior to Reserve Bank of Australia releasing the meeting minutes. Australian yields rose to the highest in three months as Abe was announced the victor.
According to Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, there was a large lift between the dollar-yen and other yen crosses after the announcement of the results. He predicted that the meeting minutes will add downward pressure on the Australian dollar as they are expected to show the RBA is open to further easing. Australian 10-year yields climbed by 0.03 percentage points to 3.14 percent, which is the highest it has been since Sept 17, they later dropped to 3.34 percent.
Hans Kunnen, the chief economist in Sydney at St. George Ltd said in a report to clients that the new government’s commitment to lift economic growth through further easing, has resulted to the yen’s decline in the recent weeks as well as the rise in bond yields. The Australian dollar gained by 0.5 percent against the yen to trade at 88.67 yen at the close of trading in Sydney on Monday, from its close on Friday 14. It had earlier touched its highest since May 2, 2011 of 89.13 yen. The currency dropped by 0.3 percent against the dollar to trade at $1.0540. The New Zealand was at 71.51 yen, the strongest it has been since October 2008, it later dropped to 71.00, which is 0.5 percent stronger than its close in the New Session on Friday. Kiwi was down 0.3 percent against the dollar to 84.39 US cents.
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