Yen`s Effective Rate Hits 5-Year High in Dec.

Tokyo, Jan. 6 (Jiji Press)--The yen's real effective exchange rate
in December 2008 rose to the highest level since November 2003, Bank of
Japan data showed Tuesday.
The trade-weighted index gauging the yen's strength relative to a
basket of 15 other currencies, including the U.S. dollar and the euro, rose
6.1 points from the previous month to 124.7 after adjustments for price
changes, against the base of 100 for March 1973, the BOJ said in a
preliminary report.
A higher reading of the index means that the yen is stronger.
In nominal terms, which are not adjusted for inflation and trade
volume, the index climbed to a record 383.2, the BOJ said.
In the reporting month, the yen shot up against the dollar on the
back of narrowing interest rate differentials between Japan and the United
States following the Federal Reserve's decision to slash its policy rate to
a range of zero to 0.25 pct.
At its peak for the month, the yen changed hands at 87.19 to the
dollar, the highest level in 13 years and five months, in mid-December.
Still, the yen's real effective exchange rate was much weaker than
165.5 marked in April 1995, when the Japanese currency hit a postwar high of
79.75 to the dollar.