The yen weakened for a second day against the dollar before the Bank of Japan ends a two-day policy meeting today at which economists say it will announce more credit-easing measures.
Japan’s currency also slid versus 12 of its 16 major counterparts on speculation authorities will intervene in the foreign-exchange markets to limit any gains by the yen. The euro declined for a second day versus the greenback on concern Europe’s sovereign debt problems will take time to resolve.
“Rumors suggest the BOJ may ease monetary policy further,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Such a scenario could re-introduce downward pressure on the yen in the short term.”
The yen declined to 83.50 per dollar as of 10:06 a.m. in Tokyo from 83.36 in New York yesterday, after strengthening to 83.16 on Oct. 1, the highest since Sept. 15. Japan’s currency traded at 114.14 per euro from 114.08. The euro fell to $1.3670 from $1.3685.
The Bank of Japan is expected to increase its 30-trillion yen ($359 billion) credit program for banks to encourage lending when its meeting concludes today, according to 14 of 17 economists surveyed by Bloomberg News. One forecasts the bank will cut the overnight loan rate to zero from 0.1 percent and buy more government bonds.
BOJ’s Meeting
The central bank may decide to buy securities backed by lending to small and midsize businesses, Nikkei English News said today, without citing anyone. The BOJ may also decide to increase purchases of long-term Japanese government bonds, the report said.
The Japanese currency also weakened on prospects that the government may intervene in the markets to sell the yen to protect the nation’s export-led recovery.
“The Bank of Japan could intervene at any time,” said Joseph Capurso, a foreign-exchange strategist at Commonwealth Bank of Australia in Sydney. “The end of the meeting may be the catalyst for them to resume intervention.”
Japan sold yen in the markets on Sept. 15 for the first time since 2004 to help exporters, joining countries across Asia and Latin America that have tempered gains in their currencies against the dollar. Brazil’s Finance Minister Guido Mantega warned Sept. 27 of a “currency war” and said his government will buy all “excess dollars” in the market to limit the real’s appreciation.
World Bank President Robert Zoellick said yesterday he sees tensions arising from currency devaluations as nations seek to buoy their economies.
Switzerland’s Banks
Europe’s currency weakened after a Swiss government- appointed panel said UBS AG and Credit Suisse Group AG need to hold almost double the capital required under Basel III rules.
“There appear to be worries that financial institutions in Europe may be required to raise more funds,” said Yoh Nihei, a Tokyo-based trading group manager at Tokai Tokyo Securities Co. “The euro is being sold.”
Switzerland’s biggest banks should hold total capital equal to at least 19 percent of their assets, weighted according to risk, compared with the 10.5 percent level announced by the Basel Committee on Banking Supervision last month, the Swiss panel said yesterday. By 2019, the lenders need to have a common equity ratio of at least 10 percent, compared with 7 percent required under Basel III rules.
The key risk to “stabilizing” Portugal’s debt ratio remains the economic outlook, even as the country is unlikely to default on its debt, Standard & Poor’s said yesterday. S&P sees the economy shrinking 1.8 percent next year and stagnating in 2012 as Prime Minister Jose Socrates cuts public workers’ wages, raises some taxes and freezes investment this year.
To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net.
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.
http://jodnet.blogspot.com
Japan’s currency also slid versus 12 of its 16 major counterparts on speculation authorities will intervene in the foreign-exchange markets to limit any gains by the yen. The euro declined for a second day versus the greenback on concern Europe’s sovereign debt problems will take time to resolve.
“Rumors suggest the BOJ may ease monetary policy further,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Such a scenario could re-introduce downward pressure on the yen in the short term.”
The yen declined to 83.50 per dollar as of 10:06 a.m. in Tokyo from 83.36 in New York yesterday, after strengthening to 83.16 on Oct. 1, the highest since Sept. 15. Japan’s currency traded at 114.14 per euro from 114.08. The euro fell to $1.3670 from $1.3685.
The Bank of Japan is expected to increase its 30-trillion yen ($359 billion) credit program for banks to encourage lending when its meeting concludes today, according to 14 of 17 economists surveyed by Bloomberg News. One forecasts the bank will cut the overnight loan rate to zero from 0.1 percent and buy more government bonds.
BOJ’s Meeting
The central bank may decide to buy securities backed by lending to small and midsize businesses, Nikkei English News said today, without citing anyone. The BOJ may also decide to increase purchases of long-term Japanese government bonds, the report said.
The Japanese currency also weakened on prospects that the government may intervene in the markets to sell the yen to protect the nation’s export-led recovery.
“The Bank of Japan could intervene at any time,” said Joseph Capurso, a foreign-exchange strategist at Commonwealth Bank of Australia in Sydney. “The end of the meeting may be the catalyst for them to resume intervention.”
Japan sold yen in the markets on Sept. 15 for the first time since 2004 to help exporters, joining countries across Asia and Latin America that have tempered gains in their currencies against the dollar. Brazil’s Finance Minister Guido Mantega warned Sept. 27 of a “currency war” and said his government will buy all “excess dollars” in the market to limit the real’s appreciation.
World Bank President Robert Zoellick said yesterday he sees tensions arising from currency devaluations as nations seek to buoy their economies.
Switzerland’s Banks
Europe’s currency weakened after a Swiss government- appointed panel said UBS AG and Credit Suisse Group AG need to hold almost double the capital required under Basel III rules.
“There appear to be worries that financial institutions in Europe may be required to raise more funds,” said Yoh Nihei, a Tokyo-based trading group manager at Tokai Tokyo Securities Co. “The euro is being sold.”
Switzerland’s biggest banks should hold total capital equal to at least 19 percent of their assets, weighted according to risk, compared with the 10.5 percent level announced by the Basel Committee on Banking Supervision last month, the Swiss panel said yesterday. By 2019, the lenders need to have a common equity ratio of at least 10 percent, compared with 7 percent required under Basel III rules.
The key risk to “stabilizing” Portugal’s debt ratio remains the economic outlook, even as the country is unlikely to default on its debt, Standard & Poor’s said yesterday. S&P sees the economy shrinking 1.8 percent next year and stagnating in 2012 as Prime Minister Jose Socrates cuts public workers’ wages, raises some taxes and freezes investment this year.
To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net.
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.
http://jodnet.blogspot.com
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