JPY Intervention? The USD/JPY Spiked at 9AM on No News
and Gold sagged immediately on the concurrent strengthening of the USD/JPY.
Anyone hearing anything? Perhaps This is just positioning after the EUR/JPY hit certain levels.
___________________________________
Yen Falls to Record Versus Euro; Japan May Sell Its Currency
Dec. 29 (Bloomberg) -- The yen fell to a record against the euro and dropped by the most in three weeks against the dollar on speculation Japan will sell its currency during the holidays.
Japanese Finance Minister Sadakazu Tanigaki yesterday said he ``will closely watch the exchange rate'' in the period. Japan sold yen the last three days of 2003.
``There's always the risk Japan will come in alone'' without assistance from U.S. or European officials, said T.J. Marta, senior currency strategist in New York for RBC Capital Markets. ``I would definitely have money off the table going into the holiday.''
The yen reached as weak as 141.47 per euro and traded at 141.39 at 9:25 a.m. in New York, from 140.25 late yesterday, according to electronic currency-trading system EBS. Japan's currency dropped to 104.15 per dollar from 103.06 yen.
Japan has holidays Dec. 31 and Jan. 3. Japanese stock markets tomorrow close for the year after morning trading.
The Bank of Japan, at the order of the Ministry of Finance, sold a record 14.8 trillion yen ($143.4 billion) in the first quarter and hasn't sold since, according to finance ministry data through Nov. 26.
Year-end yen selling by Japan, ``is perfect timing for a short-term move,'' said Reto Huenerwadel, an economist in Zurich at UBS AG. The firm is the largest trader in the daily $1.9 trillion currency market, according to Euromoney magazine. ``In the current market environment, with poor liquidity any market intervention will have a distorted impact.''
Annual Gain
The yen is still poised to complete its third annual gain against the dollar. The Nikkei 225 Stock Average was headed for a second straight yearly advance, up 6.6 percent, raising speculation overseas investors will add to their investments in Japanese shares. Foreigners have been net buyers of stocks in all but nine weeks this year.
Japan's government yesterday said industrial production rose and unemployment fell in November.
The U.S. is seeking a weaker currency as a means to shrink its current-account deficit, and isn't going to heed calls from Europe and Japan to halt the dollar's decline, said strategists including Robert Rennie at Westpac Banking Corp.
On the year, the dollar is down 7.6 percent against the euro and 3.7 percent versus the yen.
``The arguments driving the U.S. dollar lower this year are going to continue to be a factor driving it down next year,'' said Sydney-based Rennie.
The shortfall in the U.S. current account widened to a record $164.7 billion last quarter, meaning the U.S. needs to attract $1.8 billion in foreign money each day to keep the dollar from dropping. |
