All posts tagged: yen

Be Careful What You Wish For: Weaker Yen A Blessing And A Curse For Japan

Be Careful What You Wish For: Weaker Yen A Blessing And A Curse For Japan

Published by skeptic

By Simon White, Bloomberg Markets Live reporter and strategist A weaker yen will boost inflation in Japan, but it may do so to an undesirable extent, especially as there are growing signs price growth is becoming embedded. Be careful what you wish for. For years, Japan has yearned for sustainable inflation around 2%. Add a pandemic, a rise in energy prices and one of the most extensive and long-lasting loose monetary policies seen in the history of global central banking, and it may have got there. However, stopping inflation at the right level is a bit like turning a cargo ship: you have to make the decision to turn long before you need to. Headline inflation in Japan is coming off recent highs, helped by subdued oil prices. But so-called core-core CPI (ex-fresh food and energy) is proving worryingly stubborn, still hovering within ~0.5% points of its all-time highs. There are further signs of inflation becoming embedded. The percentage of inputs to the CPI basket (with over 650 of them, there is a Byzantine level …

Dollar regains momentum as yen struggles

Dollar regains momentum as yen struggles

Published by Sam

SINGAPORE : The dollar was back on the front foot on Wednesday, making modest gains after earlier losses from renewed bets on Federal Reserve rate cuts this year, while the yen eased towards the 155 per dollar level and kept intervention risks from Tokyo high. The offshore yuan further retreated from a more than three-month high hit last week, helped by hopes of further policy stimulus from Beijing to shore up its economy. It last stood at 7.2247 per dollar. The yen was last little changed at 154.75 per dollar, edging away from its peak of 151.86 hit last week on the back of suspected intervention from Japanese authorities to prop up the sliding currency. Analysts have said that any intervention from Tokyo would only serve as a temporary respite for the yen, given stark interest rate differentials between the U.S. and Japan remain. Bank of Japan Governor Kazuo Ueda said on Wednesday the central bank will scrutinise the impact of yen moves on inflation in guiding monetary policy, while the country’s Finance Minister Shunichi …

Analysis:Traders prep for another round of yen whack-a-mole

Analysis:Traders prep for another round of yen whack-a-mole

Published by Sam

LONDON : Japan’s attempts to shore up its currency are putting trading desks across the globe on high alert and dealers are taking no chances ahead of a long weekend in London and Tokyo that might offer authorities another opportunity to bolster the frail yen. The Japanese currency, which is around its weakest since 1990, has witnessed its biggest weekly price swing since 2022, when the Bank of Japan bought the yen for the first time since 1998. Traders suspect the authorities stepped in on at least two days this week and data from the BOJ suggests Japanese officials may have spent almost $60 billion in doing so – roughly what they spent on three bouts of intervention over September and October 2022. The blueprint for what they believe is intervention now includes operating in a near-vacuum of market liquidity, and a series of Japanese public holidays plus Monday’s holiday in the UK – the world’s biggest FX trading centre – could present a possible window. Monday’s suspected intervention took place on a Japanese holiday …

Japan’s yen jumps vs dollar amid specter of BOJ intervention

Japan’s yen jumps vs dollar amid specter of BOJ intervention

Published by Sam

NEW YORK/TOKYO : The yen jumped against the dollar late on Wednesday, with traders on high alert for signs of intervention by Japanese monetary authorities to boost a currency languishing near 34-year lows. The dollar fell sharply to 153 yen from about 157.55 yen for reasons that were not immediately clear, after the U.S. stock market closed and the Federal Reserve’s monetary policy meeting ended hours earlier. The dollar was last at 154.85 yen. The yen had rallied on Monday, with money market data suggesting Japan’s finance ministry had spent around $35 billion to prop up the currency that day. Official intervention data for the period will be announced at the end of May. Traders have been on watch for weeks for possible intervention by Japanese officials, as even a historic exit from negative rates has failed to lift the currency. When contacted by Reuters, Japan’s vice finance minister for international affairs, Masato Kanda, who oversees currency policy, said he had nothing to say about whether Japan had intervened in the market. Two days ago, …

Why has the yen fallen to a decade’s low and what does it mean for Japan’s economy? | Japan

Why has the yen fallen to a decade’s low and what does it mean for Japan’s economy? | Japan

Published by skeptic

The value of Japan’s currency has tumbled so much, that its value is back to where it was in 1990, shortly after Japan’s famous “bubble economy” burst. For a moment on Monday it was trading at 160 yen to US$1. A few years ago, it was closer to 100 yen to US$1. The yen’s accelerating slide could ultimately be bad news for people in Japan. A weaker yen squeezes households by increasing import costs. Japan is heavily reliant on imports for both energy supplies and food, meaning inflation could rise. A weaker yen is however a boon for Japanese exporters’ profits – and for tourists visiting Japan who find their currencies going further. Why has the yen fallen so far? The yen has been steadily sliding for more than three years, losing more than a third of its value since the start of 2021. One factor behind its fall is momentum: the yen falls because investors are selling it – and investors continue to sell it because it is falling. In such instances, the market …

Intervention Or Not, Yen Bears Will Stay Confident

Intervention Or Not, Yen Bears Will Stay Confident

Published by skeptic

By Vassilis Karamanis, Bloomberg Markets Live reporter and FX strategist Unless Japanese authorities show their hand with conviction when it comes to intervening in the spot market, the yen is bound to stay under pressure over the medium-term. The currency’s sharp rally this morning certainly looks like an intervention — it’s not often that we get a 500-pip move seemingly out of nowhere. But thin liquidity due to a public holiday in Japan that forced algorithmic trading to take over as trailing stops were triggered could be what’s driven the market. The fact that traders aren’t sure this is an official hand supporting the yen is telling. Masato Kanda, the nation’s top currency official, said no comment when asked about the moves. The market has been testing Japanese authorities’ patience — or determination — when it comes to yen weakness for some time now. And it will keep on doing so for as long as intervention threats are seen as a clumsily-played bluff. The yen kept breaching through one big level after the other on Friday …

“The Yen Collapse Has Become Disorderly”: Look For A Final, Sharp Decline Before It Hits A Floor

“The Yen Collapse Has Become Disorderly”: Look For A Final, Sharp Decline Before It Hits A Floor

Published by skeptic

The BOJ came, issued the shortest statement in the history of central banks… … and left, leaving traders stunned and speechless at the sheer idiocy of the world’s most clownish central bank, which has decided to invite currency collapse the same abandon as Zimbabwe, if it means pushing up domestic stonks a little bit more even as hyperinflation is unleashed among Japanese society. And now that the collapse in the yen is making banana republics like Turkey blush, and is making FX managers and traders who are still long the Japanese Dong Lira Yen to the imploding “developed” insolvent, everyone wants to know what happens next? Below we share to views, one from Deutsche Bank’s Geroge Saravelos, and one from SocGen’s Kit Juckes. We start with the DB FX strategist who frames the BOJ’s wilful incompetence merely as “benign neglect”, to wit: On the collapse The yen has again collapsed today to fresh record lows following the Bank of Japan meeting. We think this is warranted and that this finally marks the day where the …

US, Japan, Korea agree to consult on FX as yen, won slide

US, Japan, Korea agree to consult on FX as yen, won slide

Published by Sam

WASHINGTON :Finance leaders from the United States, Japan and South Korea agreed to “consult closely” on foreign exchange markets in their first trilateral meeting on Wednesday, nodding to concern by Tokyo and Seoul over their currencies’ recent sharp declines. The agreement in their first trilateral meeting came as receding expectations of a near-term U.S. interest rate cut pushed the yen to 34-year lows, keeping markets on alert on the chance of yen-buying intervention by Japanese authorities. “We will continue to cooperate to promote sustainable economic growth, financial stability, as well as orderly and well-functioning financial markets,” according to a joint statement released after the trilateral meeting. “We will also continue to consult closely on foreign exchange market developments in line with our existing G20 commitments, while acknowledging serious concerns of Japan and the Republic of Korea about the recent sharp depreciation of the Japanese yen and the Korean won,” it said. The dollar slid to an intraday low of 154.18 yen after the statement, before rebounding to 154.37 on Wednesday. Washington’s acknowledgement over the currency …

Dollar buoyed by strong economy, geopolitical tensions; yen weakest since 1990

Dollar buoyed by strong economy, geopolitical tensions; yen weakest since 1990

Published by skeptic

NEW YORK : The dollar briefly reached a five-month high against the euro on Tuesday and the yen fell to its lowest level since 1990 and came closer to the key 155 level, which traders are watching for possible intervention by Japanese authorities. The greenback has been bolstered by stronger-than-expected growth data, including retail sales data for March released on Monday. Stickier-than-hoped inflation in particular is seen as making it less likely that the Federal Reserve will begin cutting interest rates in the coming months. “The reality is that you have an expanding economy,” said Juan Perez, director of trading at Monex USA in Washington. “In Q4 the idea was that we were going to slow down here in the United States, but there is evidence of the contrary.” At the same time, escalating geopolitical tensions between Israel and Iran are adding a safe-haven boost to the U.S. currency. “We are very isolated from a lot of the problems in FX overseas, and now this weekend we’re finally seeing a major escalation…It makes the dollar …

Japan’s yen falls to lowest since 1990, dollar/yen up 0.6%

Japan’s yen falls to lowest since 1990, dollar/yen up 0.6%

Published by Sam

The yen weakened on Monday, pushing the dollar to its highest against the Japanese currency since June 1990, with markets alert to any signs of intervention from the Japanese authorities to prop up the yen. The decline in the yen comes amid a broadly stronger dollar underpinned by economic data that has pushed out the expected timing of the first Fed rate cut to September from June and escalating tensions in the Middle East. The dollar extended gains on Monday after stronger-than-expected March retail sales data. The yen’s slide against the dollar has revived anticipation of currency intervention. Japanese Finance Minister Shunichi Suzuki said he was watching currency moves closely, and that Tokyo is “fully prepared” to act. The dollar was last up 0.66 per cent at 154.28 yen, its strongest since 1990. Source link