Yen hits 18-month high vs dollar

The yen surged to an 18-month high against the dollar, extending the prior day's rally after the Bank Japan shocked markets by failing to provide more stimulus.

File photo of a woman counting Japanese 10,000 yen notes. (REUTERS/Shohei Miyano)

NEW YORK: The yen surged to an 18-month high against the dollar on Friday (Apr 29), extending the prior day's rally after the Bank Japan shocked markets by failing to provide more stimulus.

The Japanese unit surged on Thursday after the BoJ stood pat on monetary policy, confounding expectations it would act after a double earthquake and a string of weak readings on the world's number three economy.

The dollar tumbled to ¥106.31, its lowest level since October 2014, from ¥108.11. The euro dropped to ¥121.75 from ¥122.76.

Analysts said the central bank would likely try to talk the yen down following the unit's ascent, as it did earlier this month.

The dollar, meanwhile, continued to weaken under pressured by the Federal Reserve's go-slow signal on interest rate hikes earlier this week.

Surprisingly weak US consumer data on Friday showed Americans spent only 0.1 per cent more in March than they had in February, despite rising incomes.

The downbeat consumer report added to concerns about the strength of the US economy, after Thursday's report showing it grew at only a 0.5 per cent annual rate in the first quarter.

The euro continued its climb against the dollar, at one point hitting US$1.1459, its highest level in more than two weeks. Around 2100 GMT, the euro traded at US$1.1452, up a solid 0.9 per cent from the same time on Thursday.

Eurostat, the official statistics office, said the 19-nation eurozone economy grew 0.6 per cent quarter-over-quarter in the first three months of the year, double the rate of the two previous quarters and 1.6 per cent higher than a year ago.

"Not only is the US data not very good, but data elsewhere is pretty good: The eurozone GDP is growing faster than the US at this point," said Greg Anderson, global head of forex strategy at BMO Capital Markets.

- AFP/ec