Peso up over news of Japan’s move to stimulate economy

The government on Wednesday, Nov. 28, 2012, bid bonds dominated in dollars from the local market given the excess foreign exchange liquidity of banks in the country. National Treasurer Rosalia de Leon said borrowing dollars from the local market was less expensive for the government. AP

MANILA, Philippines—The peso inched up on Wednesday amid expectations that the central bank of Japan will implement a measure to help stimulate growth of the Japanese economy.

The local currency closed at 41.04 against the US dollar, up by 3.5 centavos from the previous day’s finish of 41.075.

Intraday high hit 41.03, while intraday low settled at 41.085.

Volume of trade amounted to $811.2 million from $568.6 million previously.

Traders said there were speculations that the Bank of Japan (BOJ) would implement a stimulus measure during the meeting of its officials on Friday amid lackluster performance of the economy. The measure is expected to be in the form of bond purchases, which are seen to boost liquidity.

Proceeds of the bond purchases are expected to partly be used by fund holders to buy emerging-market assets, such as peso-denominated securities. This expectation has led to a favorable outlook on assets from the region, thereby prompting actual buying.

The rise of the peso came with the 115.8-point increase in the Philippine Stock Exchange Index to 5,752.39.