Yen Trades Near Three-Year High Against Dollar on Japanese Economic Growth
By Miki Anzai
Yen Trades Near 3-Year High vs Dollar on Japan Economic Growth
Tokyo, Sept. 14 (Bloomberg) -- The yen traded near a 3-year
high against the dollar, as surprisingly strong economic growth
in Japan for a second straight quarter lured investors to buy yen
to purchase Japanese stocks.
The yen jumped almost 3 percent against the dollar and the
euro yesterday with central banks absent from the currency
market. Yet, the yen's relentless climb was restrained by
speculation that the Bank of Japan may sell yen again during
Tokyo time, following Friday's intervention, to slow its rise.
``The BOJ will intervene again if people keep snapping up
the yen this morning, while the bank will refrain from selling
yen, if it stays around here,' said Ryuichi Takami, a foreign
exchange manager at Sanwa Bank Ltd. ``Without intervention, the
yen may rise to 105 to the dollar this week.'
The yen traded at 106.69 to the dollar, little changed from
108.65 in late New York trading yesterday, when it reached
106.10, its highest since May 15, 1996. The Japanese currency
traded at 111.20 to the euro, little changed from 111.21
yesterday, when it touched 109.75, its highest since the
implementation of the European single currency in January.
The Bank of Japan, which acts in the foreign exchange market
for the Ministry of Finance, sold yen Friday for an estimated $3
billion to $4 billion as the government fears a stronger yen
could derail economic recovery by making exports more expensive.
The central bank acted because the yen surged more than 3
percent to a then three-year high of 107.55 to the dollar
Thursday after the government announced that April-June gross
domestic product grew by an unexpected 0.2 percent. Thursday's
surprise gave Japan consecutive quarters of economic expansion,
as the economy grew 2 percent in the previous quarter.
Unless other central banks agree to sell yen jointly, the
Bank of Japan's solo efforts won't reverse the yen's gains, said
traders. Bank of Japan Governor Masaru Hayami yesterday said that
``Japan by itself can't change the flow, that's why we have to
consult with other countries.'
The recent strong-yen trend was largely driven by U.S. and
European investors, who have bought yen to increase their
investments in Japan, sending the benchmark Nikkei 225 stock
average up almost 30 percent this year
In other trading, the euro traded at $1.0412, little changed
from $1.0424 yesterday, when it reached $1.0298, its weakest
since July 21. The dollar traded at 1.5408 Swiss francs, down
from 1.5410 francs yesterday. The British pound rose to $1.6104
from $1.6077 in New York.
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