Yen Advances on Prospects Japan’s Companies Buying Currency

By Yoshiaki Nohara and Ron Harui

March 30 (Bloomberg) -- The yen advanced, halting a four- day drop against the euro, on speculation Japanese exporters took advantage of its slide to the lowest level in almost two weeks to buy the currency.
The yen strengthened versus 15 of its 16 major counterparts as gains in Japanese stocks added to signs that demand for the nation’s assets is growing. The dollar was near the lowest in a week against the euro before reports today that economists said will show France’s economy grew at the fastest pace since March 2009 and U.S. consumer confidence rebounded, curbing demand for the greenback as a refuge.

“There’s talk the mindset of investors is changing toward active investment in assets such as Japanese equities,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd. “This, along with possible yen repatriation, is likely causing buying of the currency.”

The yen rose to 124.34 per euro as of 1 p.m. in Tokyo from 124.66 yesterday, when it dropped to 125.07, the lowest level since March 17. Japan’s currency advanced to 92.19 per dollar from 92.46. The dollar was unchanged at $1.3483. Yesterday, it fell to $1.3527, the weakest since March 23.
The Nikkei 225 Stock Average rose 0.4 percent as the MSCI World Index advanced 0.2 percent.

Exporter Repatriation 

“There’s talk of exporters’ purchases as well as last- minute repatriation by Japanese firms” before the nation’s fiscal year ends tomorrow, said Yoh Nihei, trading group manager at Tokai Tokyo Securities Co. in Tokyo. “This is causing buying of the yen.”


Japan’s large manufacturers expect the currency to average 91.16 per dollar in the six months to March 2010, according to the Bank of Japan’s Tankan survey.

France’s economy expanded 0.6 percent in the three months through December, unchanged from the preliminary reading, according to a Bloomberg News survey before Paris-based Insee releases the report today.

The Conference Board’s confidence index for U.S. consumers rose to 51 in March from 46 in February, a separate Bloomberg survey showed before the report today.

‘Continuing Recovery’ 

“Economic news out of Europe and the U.S. are indicating a continuing recovery,” said John Kyriakopoulos, head of currency strategy at National Australia Bank Ltd. in Sydney. “Improved investor risk appetite and higher commodity prices are weighing on ‘safe haven’ currencies such as the dollar, while boosting the Australian dollar.”

Australia’s currency held on to yesterday’s gain, when it surged by the most in almost six weeks, as commodity prices climbed. New Zealand’s dollar advanced toward its strongest in more than a week after a government report showed home-building approvals rose in February for the first time in three months.
Australia’s currency traded unchanged at 91.77 U.S. cents and yesterday rose 1.5 percent, the most since Feb. 16. New Zealand’s dollar gained to 71.04 U.S. cents from 70.96 cents yesterday, when it touched 71.17 cents, the most since March 19.

Crude oil for May delivery rose 2.7 percent to $82.17 yesterday, the highest settlement since March 18. Gold for immediate delivery was at $1,111.10 an ounce, trading near the highest level in one week.
South Korea’s won led most Asian currencies higher versus the dollar as stocks in the region climbed and after a central bank survey showed Korean manufacturers are the most confident they’ve been in at least seven years.

‘Bullish on Asia’ 

“Risk appetite’s up and fundamentally the news in Asia is really positive,” said Mitul Kotecha, the Hong Kong-based head of global currency strategy at Credit Agricole CIB. “There’s evidence of strong flows coming into the region and that’s helping to boost Asian currencies as well. We’re still bullish on Asia for the rest of the year.”

An index measuring manufacturers’ expectations climbed to 105, from 101 last month, the Bank of Korea said today. The reading was the highest since the fourth quarter of 2002, when the bank published its confidence survey on a quarterly basis.

The won increased 0.4 percent to 1,130.80 per dollar. The MSCI Asia-Pacific Index of regional shares rose 0.9 percent.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net.
Last Updated: March 30, 2010 00:14 EDT