Yen hits record-high against US dollar as Nikkei falls Skip to main content

Yen hits record-high against US dollar as Nikkei falls

Click to play
Advertisement
Japanese exporters will be hit by rises in the yen

Japan Earthquake

The Japanese yen has hit its strongest level against the US dollar since the end of World War II.
The exchange rate reached 76.25 yen to the dollar during US trading hours, though by Thursday afternoon in Asia it was back at 79.14 yen.
Meanwhile, the Nikkei 225 index shed another 1.4%, on concerns about the impact of a strong yen on exporters.
G7 finance ministers are to hold a conference call to discuss how to deal with global market volatility.
The call is expected to take place on Friday morning, Japan time.
The G7 is a group of the world's seven richest nations, including the US, Japan, the UK and China.
The latest market jitters come as the US expressed increasing alarm at Japan's ability to contain a possible nuclear disaster at the Fukushima Daiichi reactors, and ordered its citizens to evacuate from Tokyo.
Repatriation

US Dollar v Japanese Yen

Last Updated at 17 Mar 2011, 09:50 GMT *Chart shows local time USD:JPY intraday chart
$1 buys change %
78.8650 +
+1.62
 +
+2.09
Japan's currency has been strengthening steeply since Japan was devastated by a magnitude 9 earthquake on Friday. A rise in the yen is seen as undesirable as it undermines the competitiveness of Japanese exporters.
Analysts have been blaming the strengthening of the yen on the repatriation of assets and foreign currency by Japanese insurance firms.
Other Japanese investors also own large holdings of foreign currency assets.
During periods of volatility - such as the 2008 financial crisis - investors responded by repatriating these assets, pushing up the yen's value, and thereby cementing its status as a haven currency.
'Nervous' markets Analysts expect the G7 ministers to give Japan the go-ahead to intervene in currency markets to stabilise the yen.
"It seems inevitable that the yen will be part of a broader discussion on stabilising global markets," said Alan Ruskin of Deutsche Bank.
"It would be nothing short of amazing if they fail to at least make some veiled threat of intervention," he added.
Japan's Finance Minister Yoshihiko Noda declined to comment on whether or not Japan would step into the market but said he would keep an eye on developments.
"I will be closely watching market moves today," he said.

“Start Quote

Apart from intervention, there isn't much to stop this slide and the dollar doesn't look like it's coming back soon”
End Quote Brian Dolan Forex.com
The minister has blamed speculation for the yen's surge.
"Market moves have been nervous amid speculation, while trade has been thin," Mr Noda said.
However, economy minister Kaoru Yosano commented on Thursday that financial markets had not yet been destabilised enough to warrant a currency intervention by the G7 to weaken the yen.
"We would like to get psychological support from the G7," he said.
The economy minister also said the Japanese government did not yet intend to buy shares in order to stop the stock market sell-off.
The Nikkei has fallen 14% since the earthquake struck.
Cash injection In an effort to ease market concerns and provide liquidity, Japan's central bank pumped a further 6 trillion yen ($63bn; £39bn) into the banking system.
This is the fourth such injection of funds by the Bank of Japan, taking its total funds inflow to 34tn yen.
The Bank of Japan faces a policy conundrum.
With Japanese rates already at almost zero, the central bank cannot cut interest rates in order to weaken the yen against other major currencies, such as the dollar or euro where interest rates are also close to zero.
Analysts think the central bank may now go a step further and intervene directly in markets to stem the currency's rise by selling yen and buying dollars and other foreign currencies.
"Apart from intervention, there isn't much to stop this slide and the dollar doesn't look like it's coming back soon," said Brian Dolan, chief strategist at Forex.com.

http://www.bbc.co.uk/news/business-12768098
Labels:

Comments

Intrinsic said…
BOJ has already expanded their QE program from 5 to 10 Trillion Yen (120billion), to have the scale of QE 2 in the US, they need to implement the full size 30 Trillion Yen. As the government already indebted up to 200% of GDP, they are treading a fine line going forward. Japanese corporate, government and individuals own up to 850 billion worth US Treasuries. If they need to dip into their savings for reconstruction. Keep an eye for the yield curve on US debts.

Bank of Japan Policy options
March 17, 2011 at 3:34 PM
Post a Comment

Popular posts from this blog

Thai penis whitening trend raises eyebrows

Image copyright LELUXHOSPITAL Image caption Authorities warn the procedure could be quite painful A supposed trend of penis whitening has captivated Thailand in recent days and left it asking if the country's beauty industry is taking things too far. Skin whitening is nothing new in many Asian countries, where darker skin is often associated with outdoor labour, therefore, being poorer. But even so, when a clip of a clinic's latest intriguing procedure was posted online, it quickly went viral. Thailand's health ministry has since issued a warning over the procedure. The BBC Thai service spoke to one patient who had undergone the treatment, who told them: "I wanted to feel more confident in my swimming briefs". The 30-year-old said his first session of several was two months ago, and he had since seen a definite change in the shade. 'What for?' The original Facebook post from the clinic offering the treatment, which uses lasers to break do...
1 comment
Read more

Ancient Rakhine City of Mrauk-U Proposed for UNESCO World Heritage Site

The Irrawaddy YANGON—Myanmar’s Ministry of Religious Affairs and Culture submitted the final draft of its nomination for Mrauk-U to become a World Heritage Site to UNESCO on Monday, four months after the ministry submitted the first draft of its nomination in September 2019. If the application succeeds, Mrauk-U will be the third place in Myanmar to be inscribed as a UNESCO World Heritage Site, after the ancient cities of Bagan and Pyu. Mrauk-U is located in northern Rakhine State, around 60 km from the state capital of Sittwe. The ancient city was the seat of Arakanese kings from the 1400s until the late 1700s. At the height of their power, they controlled an area covering large parts of eastern Bengal, modern-day Rakhine State and the western part of central Myanmar. Much of the city’s remains are well-preserved and some 380 historic temples are scattered between the lush hills of northern Rakhine. Mrauk-U Heritage Trust chairwoman Daw Khin Than told The Irrawaddy on Tue...
1 comment
Read more

Sri Bhaddanta Chandramani Mahathera

The Life Story of A Distinguished And Outstanding Bhikkhu The Most Venerable Saradawpharagree Sri Bhaddanta Chandramani Mahathera The Buddhist missionary Saradaw Ashin U Chandramani was endowed with great gifts and led a famous and long life. He was a very well known, distinguished and outstanding Bhikkhu Mahathera. While living in the Kushinagar Monastery, a place close to where the Lord Buddha had passed away to Nirvana, the Government of India had offered, and he had accepted, the highest, most honourable and respected title "Guru Guru MahaGuru". He became the first ever President of all Buddhists in India.A World Buddhist Conference took place in Kathmandu during the reign of King Mahindra of Nepal. The Conference was very well attended by over one hundred thousand Buddhists from various parts of the world and it was opened by King Mahindra himself. As requested by the King, Saradawpharagree blessed all the participants with the power of Triple Gems...
Post a Comment
Read more