The dollar fell more than 1 percent against the yen to a 7-1/2 month low on Friday as the G20 pledged to maintain economic stimulus and Japanese half-year end dividend repatriations undermined flows into the greenback. The dollar slipped against most major currencies too after a draft communiqué from Group of 20 leaders said the economic support measures would remain in place for now, suggesting US interest rates would stay low.
The dollar fell below 90 yen to its weakest since mid-February. "It may also be the case that we are seeing some dividend repatriation flows coming through at the current juncture, which may also keep the yen rather pressed to the topside and dollar/yen to the downside as a consequence," said Jeremy Stretch, a currency strategist at Rabobank in London.
Some in the market cited a report that a former Japanese finance ministry official said Japanese authorities would be unlikely to take action against the yen's rise through the psychologically key level as contributing to the move. Eisuke Sakakibara, vice finance minister for international affairs in 1997-1999, told Dow Jones Newswires the MoF would not be concerned by a dollar move below 90 yen but might consider action if it fell below 85 yen.
The dollar dipped to 89.97 yen, according to Reuters data, down more than 1 percent on the day. The yen rose sharply against other currencies while the trade-weighted value of the dollar was down about 0.3 percent on the day. By 1149 GMT, the euro was up 0.2 percent on the day at $1.4687, recovering from a fall to as low as $1.4614 earlier in the day. The European single currency hit a one-year peak of $1.4845 on Wednesday on trading platform EBS.
Sterling was down nearly a percent against the Norwegian crown at 9.2580. The Norwegian central bank held interest rates steady this week but said it had considered a rise. Some analysts expect a hike next month. The pound fell as low as $1.5917, its lowest since early June, before edging back to $1.5997, down 0.4 percent on the day. It sank against the yen, falling as low as around 144.30 yen, its weakest since mid-May.