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Bernanke Strikes First Yen Blow as Yield Gap Rises
While Prime Minister Shinzo Abe piled pressure on the Bank of Japan (8301) to weaken the yen last week, the Federal Reserve struck the first blow against the currency. A signal from Fed board members that they may end bond purchases in 2013 helped drive the yen to a 2 1/2 year low of 88.41 per dollar on Jan. 4, still 15 percent stronger than its decade average. The extra yield on 10-year Treasuries instead of similar-maturity Japanese government bonds reached 1.13 percentage points last week, the most in nine months and attracting funds into dollar assets. “With a possible pickup in the U.S. economy, the dollar is ... (full story)
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