Yen un­der pres­sure af­ter Wall Street rally

The China Post - - BUSINESS INDEX & -

The yen faced selling pres­sure Thurs­day as in­vestors’ fears over main­land China’s econ­omy be­gan to ease, and as eq­uity mar­kets re­bounded fol­low­ing hints the U.S. Fed­eral Re­serve may not lift rates next month.

In Tokyo trad­ing, the U.S. dol­lar bought 119.97 yen af­ter cross­ing the 120 yen mark in ear­lier trad­ing, and nearly flat against 119.98 yen in New York.

The euro was stronger at 136.14 from 135.72 yen. The 19-na­tion euro fetched US$1.1348, up from US$1.1312 in U.S. trade.

Fears over slow­ing growth in China had sent in­vestors flee­ing to the Ja­panese cur­rency — a safe haven dur­ing times of tur­moil — with the U.S. dol­lar tum­bling to 116.18 yen ear­lier this week, its low­est level since Fe­bru­ary.

Chi­nese of­fi­cials have moved to calm mar­kets and took mea­sures, in­clud­ing cut­ting in­ter­est rates, to sup­port the world’s num­ber two econ­omy.

“The re­bound in U.S. stocks has spurred a re­ver­sal of the flight to qual­ity we’ve been see­ing,” push­ing the yen lower, Ya­suhiro Kaizaki, vice pres­i­dent for global mar­kets at Su­mit­omo Mit­sui Trust Bank, told Bloomberg News.

“The trend for a grad­ual weak­en­ing of the yen is set to con­tinue af­ter a short-term cor­rec­tion.”

Bank of Ja­pan gover­nor Haruhiko Kuroda said the yen’s sud­den rise had been “cor­rected,” as he held out the pos­si­bil­ity of more mon­e­tary eas­ing mea­sures to reach a 2.0 per­cent in­fla­tion tar­get.

Fur­ther stim­u­lus would tend to weaken the Ja­panese cur­rency.

“At this stage, we have no con­crete pro­posal for fur­ther ac­com­mo­da­tion. But if nec­es­sary, we will cer­tainly make (an) ad­just­ment,” Kuroda said in a speech de­liv­ered in New York.

Ja­pan’s top cen­tral banker also said the Chi­nese econ­omy still has “ro­bust” growth prospects, and some an­a­lysts have been “too pes­simistic” about the coun­try, Ky­odo News agency quoted him as say­ing.

The dol­lar was mixed against other Asia-Pa­cific cur­ren­cies.

It rose to SG$ 1.4034 from SG$ 1.4005 on Wed­nes­day, to 46.70 Philip­pine pe­sos from 46.62 pe­sos, and to 35.65 Thai baht from 35.58 baht.

The green­back weak­ened to 1,184.44 South Korean won from 1,186.20 won, to 66.02 In­dian ru­pees from 66.15 ru­pees, and to 14,066 In­done­sian ru­piah from 14,115 ru­piah.

The Aus­tralian dol­lar slipped to 71.13 U.S. cents from 71.19 cents, while the Chi­nese yuan fetched 18.68 yen against 18.67 yen.

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