Japan's yen has weakened against nine of the 16 most-active currencies this year as the nation's central bank kept its benchmark lending rate at the lowest among major economies, prompting investors to seek higher yields elsewhere. Financial markets in Australia, Hong Kong and the U.K. are closed today for the Boxing Day holiday.
The yen fell to 114.19 per dollar at 7:37 a.m. in New York from 114.13 yesterday. It dropped to 114.49 on Dec. 24, the weakest since Nov. 7. Japan's currency declined to 164.87 per euro from 164.40. It touched 164.90 on Dec. 24, the lowest since Dec. 13. The yen may move between 107 and 117 per dollar next year, Fujii forecast.
Japan's economic growth is slowing and policy makers need to carefully examine statistics and financial markets before determining interest rates, Bank of Japan board member Hidetoshi Kamezaki said today in a speech in Yokohama, near Tokyo.
The yen's losses may be tempered by speculation traders will buy the currency to protect barrier options that would become worthless should it weaken beyond 114.50 against the dollar. Options give holders the right to buy or sell a currency at a set price on a fixed date.