Forex: Wednesday’s review

Yesterday the yen weakened to a seven-month low against the dollar as the highest yield premium on Treasuries when compared with Japanese debt since August damped the appeal of yen-denominated assets. The yen fell for a fifth day, the most since April, after a report showed sales of previously owned U.S. homes rose to the highest in almost two years, bolstering expectations for growth in North America. It has weakened 3.6 percent since the Bank of Japan on Feb. 14 unexpectedly expanded its asset-purchase program.

The pound declined, dropping to a 10-week low versus the euro, after minutes of this month’s Bank of England meeting showed two policy makers wanted a larger increase in asset purchases than the amount finally agreed. Sterling fell against all but one of its 16 major peers and gilts gained as the minutes revealed Adam Posen and David Miles voted for a 75 billion-pound ($117.6 billion) boost in quantitative easing, instead of the 50 billion pounds supported by the other seven policy makers. Gilts also rose before a report this week forecast to confirm the U.K. economy contracted in the fourth quarter, boosting demand for safer assets.

The euro held gains against the yen after Fitch Ratings cut Greece’s credit rating to C from CCC. A default by the nation is likely in the near term, the ratings company said in a statement.