The Japanese Yen was the star of the week, set to gain more than 3%, which would be its best week since July.
Perhaps adding to the case for an increase, Tokyo’s core CPI, which excludes volatile fresh food costs, rose 2.2% year-on-year in November from a year earlier, up from 1.8% last month and beating expectations for a 2.1% increase.
However, Mizuho (NYSE:MFG) securities strategist Shoki Omori expects the Bank of Japan to keep policy settings steady next month.
“Markets are overreacting to the CPI results in Tokyo,” he said.
“It appears that algorithms intervened and took advantage of this prime opportunity to sell the dollar against the yen,” Omori said, referring to computer-generated trading against the US currency.
