By Ben Eisen, MarketWatch , Hiroyuki Kachi
NEW YORK (MarketWatch) -- The U.S. dollar hit its highest level
against the yen in nearly seven years on Friday, after the Bank of
Japan unexpectedly announced new measures to spur Japanese
growth.
The dollar (USDJPY) soared 2.7% to Yen112.33 from Yen109.22 late
Thursday. It climbed 3.9% this week and 2.7% this month.
The BOJ on Friday unexpectedly announced additional stimulus
measures, underscoring how Prime Minister Shinzo Abe's economic
revival plan has gotten off track since a national sales tax
increase in April this year dampened consumer spending.
The BOJ said it would expand its annual asset purchases -- its
main tool to spur higher inflation -- to Yen80 trillion ( or mor
than $700 billion) from the previous target range of Yen60 trillion
to Yen70 trillion. The central bank aims to achieve the new target
mostly by buying more Japanese government bonds, cementing its
status as the single largest investor in so-called JGBs.
"In a world where the Japanese Central Bank is accelerating
purchases and the U.S. has just completed purchases, that doesn't
bode particularly well for the yen," said Andrew Wilkinson, chief
market analyst at Interactive Brokers.
Wilkinson said the dollar could climb as high as Yen120. J.P.
Morgan researchers, meanwhile, revised their year-end target to
Yen115.
See: Why Pimco is betting on a stronger dollar
The WSJ Dollar Index , a measure of the dollar against a basket
of major currencies, was up 1.2% at 78.80. The ICE Dollar Index
(DXY) rose to 86.907 from 86.142.
The euro (EURUSD) fell to $1.2526 from $1.2611 late Thursday.
The British pound (GBPUSD) was down slightly on the day at
$1.5999.
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