2013.06.1405:40:02UTC+00Yen advance against majors as volatility rises, after BOJ minutes

The yen bolster against most of its major counterparts, poised for a weekly increase versus all 16, as the most volatile currency markets in a year spurred haven purchasing.

Currency Volatility

One-month implied volatility of the dollar-yen currency pair touched 18.91 percent yesterday, the most since March 2011, and was at 16.7 percent today. The JPMorgan Global FX Volatility Index skyrocketed to 11.43 percent yesterday the most since June 2012. The gauge has soared from 7.05 percent in December, which was the worst since July 2007.

German Confidence

Euro buying may be boosted before the ZEW Center for European Economic Research in Mannheim gives the latest reading of its index of investor and analyst expectations in Germany. The gauge rose to 37 from 36.4 in May, according to a Bloomberg News survey. The report, due next week, aims to predict economic developments six months in advance.

U.S. equities rose yesterday on better-than-forecast economic figures. Data showed U.S. retail sales rose 0.6 percent in May, exceeding the median economist forecast in a Bloomberg survey. The increase was the biggest in three months and followed a 0.1 percent gain in April.

Industrial production in the U.S. probably rose 0.2 percent last month, a Fed report today is predicted to show, following a 0.5 percent decline the previous month.

The Standard & Poor’s 500 Index (SPX) posted its second-biggest gain of the year, climbing 1.5 percent. The MSCI Asia Pacific Index rallied 1.5 percent today.

U.S. central bank policy makers next meet June 18-19. Chairman Ben S. Bernanke said on May 22 the Fed could reduce its monthly purchases of $45 billion of Treasuries and $40 billion of mortgage-backed securities if the employment outlook shows sustainable improvement. The Wall Street Journal reported that the Fed may push back on expectations of a rate increase.

The Dollar Index, which Intercontinentalexchange Inc. uses to monitor the greenback against the currencies of six U.S. trade partners, was little changed at 80.723, declining for a fifth day.