Yen Rallying to Record 75 Seen in Charts by Hedge Fund

(Bloomberg) The yen’s first annual rally in five years is on course to push it to a record versus the dollar in a few years as the Bank of Japan refrains from adding monetary stimulus and fails to end deflation, according to hedge fund GCI Asset Management Inc.

The BOJ is unlikely to cut interest rates further as it tries to help Japanese lenders cope in a sub-zero rate environment, which means the nation’s current-account surplus and deflationary economy would fuel further gains in its currency, said Tatsuhiro Iwashige, chief foreign-exchange strategist of the investment solutions group at Tokyo-based GCI Asset. The firm’s $100 million GCI Systematic Macro Fund surged 30 percent in the first half this year thanks to timely wagers on the yen and the pound.

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