Yen slips as Abe presses BOJ on inflation target
The yen fell on Monday to trade near a 20-month low against the dollar after incoming prime minister Shinzo Abe heaped fresh pressure on the Bank of Japan to adopt a higher inflation target.
The yen, which rose on Friday as some investors trimmed large bets against it, was weighed down by Abe's comments on Sunday that he would try to revise a law guaranteeing the BOJ's independence if his demand for a binding 2 percent inflation target – double its current goal – is not met.
The dollar was up 0.2 percent on the day at 84.42 yen
Chartists said the dollar needed to overcome 85.05 yen, its 200-week moving average for it to sustain further gains.
"There has been some pretty significant yen selling all through the night and into this morning," said Peter Kinsella, currency strategist at Commerzbank. "It is very noticeable we have not seen any retracement or dip in dollar/yen at all. The market is really saying they are convinced on yen weakness and that is what we are going to see for the remainder of this year and in the course of next year."
The U.S. currency hit a 20-month high of 84.62 yen last Wednesday as the yen fell after a landslide election victory for Abe's Liberal Democratic Party (LDP).
Abe, who is set to become Japan's prime minister on Wednesday, has called for aggressive monetary stimulus by the BOJ to beat deflation and this has dragged on the yen.
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