The yen reached the strongest level versus the dollar since the Bank of Japan intervened to weaken the currency as a report showed lower-than-forecast U.S. consumer confidence, boosting demand for refuge assets.
The Bank of Japan sold yen Sept. 15 to stem an 11 percent year-to-date surge in the currency that was hampering an export- led economic recovery. The dollar reached a five-month low against the euro as consumer sentiment dropped and U.S. home prices rose at a slower pace in July, fueling speculation the Federal Reserve will resume quantitative easing, or the large- scale purchase of debt, to bolster the economy.
“We’re in that period where the other safe havens, the yen and the franc, will gain against the U.S. dollar,” said Brian Kim, a currency strategist at UBS AG said by phone from Stamford, Connecticut. “People are bracing themselves for whatever level of easing the Fed may come up with if the recovery continues to be soft.”
The yen strengthened 0.5 percent to 83.85 yen per dollar as of 11:17 a.m. in New York, from 84.29. It touched 83.81, the highest level since Sept. 15, when it also touched a 15-year low of 82.88. The euro bought 113.63 yen, compared with 113.41 yen, after touching 112.67 yen.
The dollar fell 0.7 percent to $1.3553 per euro, compared with $1.3455 yesterday.
Official Sales
The Ministry of Finance in Tokyo will report on Sept. 30 the amount of yen the central bank sold from Aug. 28 through Sept. 28 to curb the appreciation of the currency. Demand for the yen has been tempered by speculation Japan will sell its currency again.
Confidence among U.S. consumers fell in September to the lowest level in seven months as Americans became more pessimistic about the labor market. The Conference Board’s confidence index declined to 48.5, lower than forecast, from 53.2 the prior month. The median estimate of economists in a Bloomberg News survey was for a decline to 52.1.
The S&P/Case-Shiller index of property values increased 3.2 percent from July 2009, the smallest year-over-year gain since March, the group said today in New York. Home prices in 20 U.S. cities rose at a slower pace in July from a year earlier. Economists projected prices would rise 3.1 percent year over year, according to the median of 28 forecasts in a Bloomberg News survey.
Structural Change
“Japan should change its structure to raise living standards using the strong yen,” by encouraging overseas mergers and acquisitions and purchasing mining rights for natural resources, Kazuo Mizuno, deputy director-general of economic assessment at the Cabinet Office, said in an interview in Tokyo today.
“Japan had to put out the fire” by selling the yen, he said. U.S. policies indicate the currency trend won’t be reversed soon so “Japan should expect the dollar to remain weak in the mid-term,” he said.
Japan’s exports increased 15.8 percent from a year earlier in August, the slowest growth since December, the Finance Ministry said in Tokyo yesterday.
The Swiss franc gained 1 percent the dollar to a record 97.59 centimes, from 98.53 yesterday. Investors traditionally buy the franc during times of economic turmoil because of the perceived stability of the Swiss economy and current account surplus, and offload the currency when they want to take on more risk.
Pound Down
The pound plummeted against the euro to the weakest since May after Bank of England policy maker Adam Posen said the central bank should restart its asset- purchase program to prevent persistent slow economic growth.
“There remains a significant gap between what the economy could be producing at full employment and it currently produces,” he said in a speech today in Hull, England, today. “Monetary policy should continue to be aggressive about promoting recovery, and, subject to further debate, I think further easing should be undertaken.”
The pound fell 1 percent to 85.85 pence per euro, the weakest since May 26 when it touched 85.82.
The dollar has depreciated 10.8 percent versus the euro this quarter in the worst performance among the European currency’s 16 major counterparts. The greenback has pared this year’s advance to 5.3 percent.
China Policy
The yuan has gained 1.8 percent this month as the U.S. House of Representatives considers legislation this week that would let companies petition for higher duties on imports from China to compensate for the effects of a weak Chinese currency.
China may retaliate against U.S. businesses operating in the country if Congress passes legislation intended to force a revaluation of the yuan, Robert Roche, the chairman of the American Chamber of Commerce in Shanghai, said at a briefing in Washington yesterday.
The dollar is “one step nearer” to a crisis as debt levels in the world’s largest economy increase, said Yu Yongding, a former adviser to China’s central bank. Any appreciation of the dollar is “really temporary” and a devaluation of the currency is inevitable as U.S. debt rises, Yu said in a speech in Singapore today.
To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
http://jodnet.blogspot.com
The Bank of Japan sold yen Sept. 15 to stem an 11 percent year-to-date surge in the currency that was hampering an export- led economic recovery. The dollar reached a five-month low against the euro as consumer sentiment dropped and U.S. home prices rose at a slower pace in July, fueling speculation the Federal Reserve will resume quantitative easing, or the large- scale purchase of debt, to bolster the economy.
“We’re in that period where the other safe havens, the yen and the franc, will gain against the U.S. dollar,” said Brian Kim, a currency strategist at UBS AG said by phone from Stamford, Connecticut. “People are bracing themselves for whatever level of easing the Fed may come up with if the recovery continues to be soft.”
The yen strengthened 0.5 percent to 83.85 yen per dollar as of 11:17 a.m. in New York, from 84.29. It touched 83.81, the highest level since Sept. 15, when it also touched a 15-year low of 82.88. The euro bought 113.63 yen, compared with 113.41 yen, after touching 112.67 yen.
The dollar fell 0.7 percent to $1.3553 per euro, compared with $1.3455 yesterday.
Official Sales
The Ministry of Finance in Tokyo will report on Sept. 30 the amount of yen the central bank sold from Aug. 28 through Sept. 28 to curb the appreciation of the currency. Demand for the yen has been tempered by speculation Japan will sell its currency again.
Confidence among U.S. consumers fell in September to the lowest level in seven months as Americans became more pessimistic about the labor market. The Conference Board’s confidence index declined to 48.5, lower than forecast, from 53.2 the prior month. The median estimate of economists in a Bloomberg News survey was for a decline to 52.1.
The S&P/Case-Shiller index of property values increased 3.2 percent from July 2009, the smallest year-over-year gain since March, the group said today in New York. Home prices in 20 U.S. cities rose at a slower pace in July from a year earlier. Economists projected prices would rise 3.1 percent year over year, according to the median of 28 forecasts in a Bloomberg News survey.
Structural Change
“Japan should change its structure to raise living standards using the strong yen,” by encouraging overseas mergers and acquisitions and purchasing mining rights for natural resources, Kazuo Mizuno, deputy director-general of economic assessment at the Cabinet Office, said in an interview in Tokyo today.
“Japan had to put out the fire” by selling the yen, he said. U.S. policies indicate the currency trend won’t be reversed soon so “Japan should expect the dollar to remain weak in the mid-term,” he said.
Japan’s exports increased 15.8 percent from a year earlier in August, the slowest growth since December, the Finance Ministry said in Tokyo yesterday.
The Swiss franc gained 1 percent the dollar to a record 97.59 centimes, from 98.53 yesterday. Investors traditionally buy the franc during times of economic turmoil because of the perceived stability of the Swiss economy and current account surplus, and offload the currency when they want to take on more risk.
Pound Down
The pound plummeted against the euro to the weakest since May after Bank of England policy maker Adam Posen said the central bank should restart its asset- purchase program to prevent persistent slow economic growth.
“There remains a significant gap between what the economy could be producing at full employment and it currently produces,” he said in a speech today in Hull, England, today. “Monetary policy should continue to be aggressive about promoting recovery, and, subject to further debate, I think further easing should be undertaken.”
The pound fell 1 percent to 85.85 pence per euro, the weakest since May 26 when it touched 85.82.
The dollar has depreciated 10.8 percent versus the euro this quarter in the worst performance among the European currency’s 16 major counterparts. The greenback has pared this year’s advance to 5.3 percent.
China Policy
The yuan has gained 1.8 percent this month as the U.S. House of Representatives considers legislation this week that would let companies petition for higher duties on imports from China to compensate for the effects of a weak Chinese currency.
China may retaliate against U.S. businesses operating in the country if Congress passes legislation intended to force a revaluation of the yuan, Robert Roche, the chairman of the American Chamber of Commerce in Shanghai, said at a briefing in Washington yesterday.
The dollar is “one step nearer” to a crisis as debt levels in the world’s largest economy increase, said Yu Yongding, a former adviser to China’s central bank. Any appreciation of the dollar is “really temporary” and a devaluation of the currency is inevitable as U.S. debt rises, Yu said in a speech in Singapore today.
To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
http://jodnet.blogspot.com
0 التعليقات
Post a Comment