Yen rises in Asia

The yen firmed against the euro and dollar in Asian trading on Friday as markets braced for more conflicting comments on currencies as officials from the Group of 20 nations gathered in Moscow. The yen was also underpinned by expectations that Japanese Prime Minister Shinzo Abe is close to selecting Toshiro Muto as his nominee for Bank of Japan governor. A decision could come in the next few days, sources close to the process told Reuters.
While any of Abe's choices is likely to share his views that the central bank should pursue aggressive stimulus measures to end nearly two decades of deflation, Muto is seen as less radical than some of the other likely contenders. Muto, who served as deputy BoJ governor from 2003 to 2008, has downplayed the idea advocated by some lawmakers that the central bank should buy foreign bonds to keep the yen in check. "There might be some differences in their willingness to take such steps as foreign bond buying, but all of the candidates are seen as continuing easy monetary policy," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
The euro slid about 0.6 percent to 123.49 yen, off a two-week low of 123.195 earlier in the session. It hit a 34-month high of 127.71 a week earlier. The dollar shed 0.5 percent to 92.46 yen, dropping as far as a one-week low of 92.25 yen after taking out weak support and stop-loss orders at 92.50 yen. Stronger support seen at 92.00 yen. It moved away from a 33-month high around 94.47 set on Monday.
While some market participants appeared eager to use Muto's likely nomination as a reason to cover their yen-short positions ahead of this weekend's conclusion of the G20 meeting, investors remained wary about the yen's upside with the BOJ under intense political pressure to reflate the economy. Japan's expansive policies that have driven down the value of the yen have been in sharp focus of the G20 finance officials. Russia's finance "sherpa", Deputy Finance Minister Sergei Storchak, said the drafting discussion was proving "difficult", but the final text would not single out Japan for criticism. Storchak told reporters that there was no competitive devaluation, but only "market reaction to exclusively internal decision making." Against the greenback, the euro rose about 0.1 percent to $1.3388, having hit a three-week low of $1.3315 on Thursday. The euro was still well off a 13-month high of $1.3711 set early this month.