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Dollar builds strength

 

dollar brown, money, oldThe Australian dollar has hit 100 Japanese yen for the first time in 18 months, giving the local currency a leg up against the greenback.

At 0700 AEDT on Wednesday, the local currency was trading at 87.02 US cents, up from 86.27 cents on Tuesday, and at 100.41 Japanese yen, up from 99.38 yen.

The Australian dollar reached 100 Japanese yen on Tuesday night for the first time since May 2013 – one of the few times since the early 1990s that the local currency has passed the 100 yen milestone.

The Aussie has been steadily climbing against the yen since the Bank of Japan’s surprise announcement last month that it was increasing its already vast bond buying program in a bid to kickstart its economy.

The central bank said it had ramped up its bond buying program by as much as 20 trillion yen ($A196.92 billion) a year, to 80 trillion yen.

That announcement, combined with a lack of economic data out of the US with the Veterans Day public holiday on Tuesday, had driven demand for Australian dollar/Japanese yen, BK Asset Management MD, Kathy Lien, said.

“The lack of data is reminding investors that we may be moving into a period of lower volatility,” Lien said.

“That’s lending quite a bit of support to Aussie/yen and the strength of Aussie/yen is promoting the gains of the Australian dollar/US dollar.”

AAP

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