US deficit to worsen, G7 oil focus boost yen

In this Bloomberg article on Japanese stocks and currency, there’s some interesting information on how the dollar comes into play:

`Although past depreciation of the dollar is still helping to some degree, as the economy grows at a faster rate the deficit will probably tend to worsen….He’s the second Fed official this month to make such a prediction. The Fed doesn’t set dollar policy, which is managed by the Treasury….San Francisco Fed President Janet Yellen said the current-account gap will expand should the U.S. currency stay near present levels.

Another thing helping the Yen is that the G7 will be looking for ways to reduce oil prices:

“The G-7 will focus on higher oil prices and what to do about global growth, and that benefits the yen,” said Meg Browne, a currency strategist at HSBC Bank USA in New York.

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