Dovish noises from central banks send yen lower The yen fell this week, even allowing a broadly weaker dollar to climb back above Y100 for the first time in two months, as investors had to weigh up which of the two central banks - the US Federal Reserve or the Bank of Japan - was likely to be the more dovish in the coming months. In Japan on Thursday, third-quarter growth fell to an annualised 1.9 per cent and prompted speculation that the BoJ would fire the monetary arrow again in the coming weeks as it attempts to get the "Abenomics" programme - which delivered 4.3 per cent growth in the first quarter and 3.8 per cent in the second - back on track. Later on Thursday, Janet Yellen, the nominee to the Fed chair, delivered a strong defence of the US central bank's quantitative easing programme at her confirmation hearing to the Senate's banking committee, that was regarded by most analysts as dovish. The key point for trade on the dollar-yen currency cross, therefore, was which central bank was likely to hold looser monetary policy the longer. Price action suggested the yen, as the dollar climbed 1.1 per cent over the week to Y100.19, having hit a two-month high on Friday of Y100.44. Analysts also backed the yen to resume its long-term weakening trend after several months of hovering close to the Y100 level. "Moderating growth in Japan is doing two things," said Derek Halpenny at Bank of Tokyo Mitsubishi UFJ. "Firstly, it is raising concerns over "Abenomics" and whether sustainable growth can be achieved, and secondly, it is leading the market to ponder BoJ monetary easing." Hans Redeker at Morgan Stanley agreed: "As reform measures continue and slow growth is likely met with increased expectations of further BoJ action, the yen-weakening trend is expected to remain on track." The yen also fell against its other main rivals. The euro rose 1.9 per cent over the week to Y134.96 and the pound gained 1.6 per cent to Y161.23. The dollar was weaker against most other currencies, however, as the Yellen testimony cast further doubts about the likelihood of the Fed scaling back asset purchases in December. Data on Friday showing an unexpectedly large downturn in the November Empire State manufacturing survey, suggested some of the hangover of October's government shutdown may remain to be seen. The euro rose 0.9 per cent on the week to $1.3488, while sterling gained 0.6 per cent to $1.6121.