Tags: Baran | dollar | 118 | yen

Hedge Fund Manager Baran: Dollar Will Reach as High as 118 Yen

By Dan Weil   |   Friday, 10 May 2013 08:32 AM

The yen broke through the 100 dollar resistance level Friday and was trading at 101.63, its weakest level in more than 4 ½ years.

Now the question is will how low can it go. David Baran, co-founder of Tokyo-based hedge fund Symphony Financial Partners, says he doesn't see the dollar stopping until 115 to 118 yen.

"Give it time, it will happen," he tells The Wall Street Journal.

Editor's Note:
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A weaker yen helps Japan by boosting its exports. But it can hurt the United States by limiting our exports to Japan.

The Bank of Japan's massive easing is what pushed the yen down in the first place. The Bank of Japan announced last month that it would seek to double its monetary base within two years, The Journals states.

Strong economic news from the United States also helped push the dollar through the 100 yen threshold.

The dollar slipped against the yen on news of weaker-than-expected U.S. growth in the first quarter (2.5 percent), but the dollar gained on news of the 165,000 payroll increase for April.

The median forecast in a survey of banks by The Wall Street Journal calls for a 105 yen rate by year-end.

Earlier this week, Credit Agricole predicted the dollar would surpass 100 yen "very soon," according to a report obtained by Bloomberg.

Rising Treasury yields will entice Japanese investors to buy U.S. bonds, says report author Mitul Kotecha, Credit Agricole's head of global markets research for Asia, Bloomberg reports.

"There's every sense that this repatriation that we've seen in recent weeks is going to give way to a pretty significant outflow" of funds from Japan, he explains.

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