Yen surges as Bank of Ja­pan chief says ad­di­tional weak­ness ‘un­likely’

The China Post - - BUSINESS INDEX & -

The yen ral­lied sharply in Wed­nes­day af­ter­noon trad­ing af­ter the head of the Bank of Ja­pan said a fur­ther slide in the cur­rency was un­likely.

In re­sponse to the com­ments from Haruhiko Kuroda, the dollar slid to 122.71 yen from 124.53 yen in morn­ing trade. It was above 125 yen, at a 13-year high, ear­lier this week.

The euro also dropped, buy­ing 138.67 yen from 140.51 in the morn­ing, while it was slightly higher at US$1.1303 from US$1.1297 in New York.

Since the BOJ un­leashed an­other round of mon­e­tary stim­u­lus in Oc­to­ber, the Ja­panese unit has been on a steep slide. This ac­cel­er­ated af­ter U.S. Fed­eral Re­serve chief Janet Yellen sig­naled that the U.S. cen­tral bank was likely to start rais­ing in­ter­est rates this year — a plus for the dollar.

But “a U.S. rate hike would not nec­es­sar­ily lead to a cheaper yen,” Kuroda told a par­lia­men­tary com­mit­tee Wed­nes­day, call­ing a fur­ther decline in the unit “un­likely.”

While the yen’s sharp decline has been good news for Ja­panese ex­porters, it has pushed up the cost of im­ports and eroded con­sumers’ pur­chas­ing power.

Ear­lier Wed­nes­day, ex­pec­ta­tions that the U.S. cen­tral bank would start rais­ing in­ter­est rates be­fore year-end were am­pli­fied af­ter the JOLTS (Job Open­ings and La­bor Turnover Sur­vey) re­port showed a surge in job va­can­cies.

Mean­while, there is grow­ing spec­u­la­tion that Greece is near­ing a bailout deal with its in­ter­na­tional cred­i­tors that would avoid a de­fault and pos­si­ble eu­ro­zone exit.

Cash-strapped Athens sub­mit­ted new pro­pos­als Tues­day to end a stand­off with the Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund be­fore the lat­est res­cue pack­age ex­pires at the end of June.

The dollar weak­ened against other Asi­aPa­cific cur­ren­cies, eas­ing to SG$1.3481 from SG$1.3543 on Tues­day, to 1,111.38 South Korean won from 1,120.70 won, and to 33.70 Thai baht from 33.73 baht.

It also de­clined to 44.97 Philip­pine pe­sos from 45.13 pe­sos, to 63.92 In­dian ru­pees from 63.98 ru­pees, and 13,310 In­done­sian ru­piah from 13,380.00 ru­piah.

The Aus­tralian dollar rose to 76.92 U.S. cents from 76.89 cents while the Chi­nese yuan bought 19.82 yen from 20.08 yen.

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