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The euro climbed against the yen after falling for three days, prompting bets the move lower was overdone. The euro rose for the first time in four days against the dollar after dropping to the lowest in almost a week yesterday amid a decrease in a gauge of euro-area industry based on a survey of purchasing managers.
The yen weakened earlier today after versus the dollar Bank of Japan Governor Masaaki Shirakawa said the central bank and the government share the same view on the economy, increasing concern the central bank may increase stimulus measures to boost the nation’s economy, which would debase the currency. Finance Minister Jun Azumi said the Bank of Japan established an inflation target of 1 percent on Feb. 14, replacing earlier wording that the central bank had an “understanding” of where consumer prices should go. It also said it would add 10 trillion yen ($119 billion) yen of stimulus to the economy.
IntercontinentalExchange Inc.’s Dollar Index, used to track the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, slid 0.5 percent to 79.377. It rose to as high as 80.738 last week as signs of strength in the U.S. economic recovery damped expectations of further Federal Reserve asset purchases, or quantitative easing. Fed Bank of St. Louis President James Bullard said monetary policy may be at a ‘‘turning point” as the world’s largest economy strengthens. With Fed policy currently “on pause, it may be a good time to take stock of whether we may be at a turning point,” Bullard said in a speech in Hong Kong today. The U.S. economy may expand 3 percent this year, he said, adding that “the outlook has improved markedly” over the past eight months. The Fed has held its target rate at a range of zero to 0.25 percent since December 2008.
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