The U.S. dollar rose against Japan's currency Wednesday, finding strength after a pullback yanked the greenback from its test of the ¥100 level. The dollar bought 98.20 yen during Asian trade, up from ¥97.57 late Tuesday. The dollar last week appeared poised to breach to the psychologically key ¥100 level after the Bank of Japan unveiled a monetary-stimulus program that was more aggressive than many had anticipated. But as that level drew closer, the greenback encountered resistance. The dollar was rocked on Monday, falling 1.9% against the yen as the Japanese currency benefitted from safe-haven bids as gold and other assets plunged in the wake of disappointing economic data from China. The yen's gains at the start of the week extended an advance Friday, when the dollar lost ground after the U.S. Treasury Department warned Japan “to refrain from competitive devaluation and targeting its exchange rate for competitive purpose." The dollar, which lost had ground against other rivals Tuesday, turned higher, pushing the ICE dollar index ,a measure of the dollar against a basket of six other major currencies, up to 81.933 from 81.781. But the WSJ Dollar Index , a rival gauge that uses a slightly larger basket, slipped to 73.29 from late Tuesday's level of 73.50. In other currency moves, the euro fell to $1.3170 after climbing on Tuesday to $1.3185, and the British pound changed hands at $1.5351, slipping from $1.5371. The Australian dollar traded at $1.0347, higher than $1.3090 late Tuesday. No one-way bet on yen: HSBC HSBC currency strategist David Bloom wrote in a report Tuesday that while the market expects further yen weakness in inevitable as a result of the Bank of Japan's monetary-easing program, “we believe it is not so straightforward" and that the yen isn't a one-way bet. There's a “crooked line" between quantitative easing and a currency's performance, Bloom said, citing the dollar index's fall back to November 2008 levels in the wake of three QE programs by the U.S. Federal Reserve. Likewise, the euro “ultimately benefited from LTRO balance-sheet expansion," he said, referring to the European Central Bank's “long-term refinancing operations" bank-lending program aimed at calming the euro-zone debt crisis. Bloom said other central banks have “been even more aggressive than the [Bank of Japan] without fostering currency upheaval." For example, the U.K.'s monetary base has risen roughly fivefold since 2008, and the U.S.'s monetary base has more than tripled since 2008, while Japan is aiming to double the size of its monetary base over two years. Bloom said the prospective moves in the relative size of money supply in these different economies could justify only part of the rally seen in the dollar against the yen, he said. At best, HSBC's analysis would suggest a dollar rally of 15% vs. the Japanese unit, “not the 28% surge witnessed since October 2012," Bloom said. Marketwatch
