Related News
Yen drops, Nikkei up on Japan FX intervention
Source: Agencies |
September 15, 2010, Wednesday
|
Online Edition
Online Edition
JAPAN intervened in foreign exchange markets for the first time in six years today to stem economic damage from the surging yen, pushing its currency sharply lower and lifting Tokyo stocks by almost 3 percent.
By early afternoon, the dollar was up more than 2 percent at 85.00 yen rebounding from a fresh 15-year low of 82.87 yen against the Japanese currency hit in early trade.
Finance Minister Yoshihiko Noda confirmed the intervention, saying Tokyo was communicating with authorities overseas but indicating that Japan had acted alone.
Market sources said it continued to intervene through the morning, selling the yen to stem a rise that was threatening the country's fragile economic recovery.
The Nikkei reversed early losses and surged 2.8 percent on word of the intervention. Shares of exporters, which have been dogged by the yen's strong gains this year, were among the biggest winners, with Sony Corp rising nearly 4 percent.
"Japan's authorities have declared war in sending a signal that they will not allow the dollar/yen to fall to 80 easily," said Lee Jin-woo, head of the research centre at NH Investment & Futures in Seoul.
"It has become difficult for investors to make a one-way bet on a stronger yen. I think dollar/yen may try to rise to 86, a 60-day moving average and where players have built up large dollar-short positions."
Simon Flint, Nomura Securities' global head of foreign exchange research based in Singapore, said Japan will be seen as a special case.
"Obviously its economy has been in significant trouble for a while, stocks have been depressed for some time, export performance relative to the Asian peer group has been very weak. To some degree there will be some sympathy in the rest of the world for Japan's predicament."
Prime Minister Naoto Kan's government has been trying to talk down the yen in recent weeks but had stopped short of intervening in the markets, apparently worried that acting without Group of Seven partners would not be very effective.
Kan was re-elected ruling party leader yesterday, decisively fending off a challenge from powerbroker Ichiro Ozawa, an outspoken advocate of intervention.
But it was unclear whether Kan's government had the stomach for a prolonged and expensive campaign similar to Japan's last foray into foreign exchange markets in 2003-2004.
US officials at the Federal Reserve and the Treasury declined to comment immediately about Tokyo's action.
Stocks elsewhere in Asia struggled.
The MSCI index of Asia Pacific stocks outside Japan rose 0.1 percent, focusing more on questions surrounding the global economic recovery and held in check by a lacklustre performance on Wall Street overnight.
COMMODITIES FALL
Spot gold a traditional safe port of call amid volatile currency and stock markets, fell US$3 to US$1,267.30 ounce by midday after rising as high as US$1,274.75 yesterday -- its biggest one-day gain in four months as economic uncertainty lured nervous investors into bullion.
Oil prices also fell after Enbridge Inc said repairs to a key pipeline taking Canadian crude to the United States were nearly complete and it hoped to gain approval to resume shipments.
US crude for October delivery was down 60 cents, or 0.78 percent, at US$76.20 per barrel.
US share prices ended mostly lower yesterday. The Dow Jones industrial average fell 0.2 percent, the Standard & Poor's 500 Index lost 0.1 percent and the Nasdaq Composite Index rose 0.2 percent.
By early afternoon, the dollar was up more than 2 percent at 85.00 yen rebounding from a fresh 15-year low of 82.87 yen against the Japanese currency hit in early trade.
Finance Minister Yoshihiko Noda confirmed the intervention, saying Tokyo was communicating with authorities overseas but indicating that Japan had acted alone.
Market sources said it continued to intervene through the morning, selling the yen to stem a rise that was threatening the country's fragile economic recovery.
The Nikkei reversed early losses and surged 2.8 percent on word of the intervention. Shares of exporters, which have been dogged by the yen's strong gains this year, were among the biggest winners, with Sony Corp rising nearly 4 percent.
"Japan's authorities have declared war in sending a signal that they will not allow the dollar/yen to fall to 80 easily," said Lee Jin-woo, head of the research centre at NH Investment & Futures in Seoul.
"It has become difficult for investors to make a one-way bet on a stronger yen. I think dollar/yen may try to rise to 86, a 60-day moving average and where players have built up large dollar-short positions."
Simon Flint, Nomura Securities' global head of foreign exchange research based in Singapore, said Japan will be seen as a special case.
"Obviously its economy has been in significant trouble for a while, stocks have been depressed for some time, export performance relative to the Asian peer group has been very weak. To some degree there will be some sympathy in the rest of the world for Japan's predicament."
Prime Minister Naoto Kan's government has been trying to talk down the yen in recent weeks but had stopped short of intervening in the markets, apparently worried that acting without Group of Seven partners would not be very effective.
Kan was re-elected ruling party leader yesterday, decisively fending off a challenge from powerbroker Ichiro Ozawa, an outspoken advocate of intervention.
But it was unclear whether Kan's government had the stomach for a prolonged and expensive campaign similar to Japan's last foray into foreign exchange markets in 2003-2004.
US officials at the Federal Reserve and the Treasury declined to comment immediately about Tokyo's action.
Stocks elsewhere in Asia struggled.
The MSCI index of Asia Pacific stocks outside Japan rose 0.1 percent, focusing more on questions surrounding the global economic recovery and held in check by a lacklustre performance on Wall Street overnight.
COMMODITIES FALL
Spot gold a traditional safe port of call amid volatile currency and stock markets, fell US$3 to US$1,267.30 ounce by midday after rising as high as US$1,274.75 yesterday -- its biggest one-day gain in four months as economic uncertainty lured nervous investors into bullion.
Oil prices also fell after Enbridge Inc said repairs to a key pipeline taking Canadian crude to the United States were nearly complete and it hoped to gain approval to resume shipments.
US crude for October delivery was down 60 cents, or 0.78 percent, at US$76.20 per barrel.
US share prices ended mostly lower yesterday. The Dow Jones industrial average fell 0.2 percent, the Standard & Poor's 500 Index lost 0.1 percent and the Nasdaq Composite Index rose 0.2 percent.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
