Dollar rises above 100 yen for 1st time in 4 years
TOKYO — The dollar soared above 100 yen for the first time in more than four years Friday, driven by aggressive credit-easing aimed at reviving Japan’s sluggish economy and improved U.S. economic figures.
The U.S. dollar rose as high as 101.30 yen, the first time since April 2009 that the greenback has traded above 100 yen. The move lifted Japanese stocks to their highest level in more than five years.
The weaker yen is a boon to Japan’s major auto and electronics exporters. The government said the yen’s fall signaled that Prime Minister Shinzo Abe’s policy mix of increased public spending and aggressive monetary easing, dubbed “Abenomics,” was proving successful. Kick-starting the economy has been Abe’s top priority since he took office late last year.
“With Abenomics, we hope that the Japanese economy will grow and can contribute to the global economy,” said Yoshihide Suga, the chief Cabinet spokesman. “It’s better that stocks are high than low. We believe this is a sign that our policies are progressing well.”
Japan’s Nikkei 225 stock average jumped 2.9 percent to 14,607.54, its highest close since January 2008.
The central bank’s monetary easing, and expectations it will help reverse persistent deflation, have helped drive the value of the yen down by more than 20 percent against the dollar since October, when it was trading at around 78 yen.
The yen’s sustained fall has riled some of Japan’s trading partners but generally won support from leaders of other major economies eager to see the world’s third-biggest economy recover from two decades of stagnation. Abe has pushed both fiscal and monetary stimulus strategies to help Japan end a long bout of deflation and support domestic demand.
Japanese officials have fought accusations that Tokyo may be manipulating its currency to give its exporters a boost, and so far international financial institutions generally have backed Abe’s approach.
“The yen’s value is at a reasonable level, since the accommodative plan of the Bank of Japan is quite ambitious,” Naoyuki Shinohara, deputy director of the International Monetary Fund, told reporters in Tokyo. “The easy monetary policy will cause the currency to depreciate. That is axiomatic,” he said.