By Kristine Aquino and Lucy Meakin -
Oct 5, 2012 3:47 PM GMT+0800
The yen rallied from near its lowest
level in more than two weeks against the dollar after the Bank
of Japan (8301) refrained from expanding stimulus at the conclusion of
its meeting today.
The yen strengthened versus most of its 16 major counterparts and pared a weekly decline versus the dollar, after BOJ officials kept the bank’s asset-purchase fund, its main policy tool, unchanged. The euro was 0.2 percent from a two-week high after European Central Bank President Mario Draghi said the bank is ready to start buying government bonds as part of a program to help ease borrowing costs for the region’s debt- ridden nations.
“The BOJ’s inaction disappointed the market a little bit,” said Minori Uchida, chief analyst at Bank of Tokyo- Mitsubishi UFJ Ltd. Tokyo. “There’s some unwinding of yen selling.”
The yen gained 0.1 percent to 78.39 per dollar at 8:44 a.m. London time. It touched 78.72 yesterday, the weakest since Sept. 19. It rose 0.3 percent to 101.94 per euro, snapping a six-day slide. Europe’s shared currency was little changed at $1.3002. It reached $1.3032 yesterday, the strongest since Sept. 21.
Against the greenback, the euro has advanced 1.1 percent since Sept. 28 and the yen is headed for a 0.6 percent slide.
The BOJ said today in a statement that its bond-buying program will remain at 55 trillion yen. The outcome was expected by all 20 economists surveyed by Bloomberg News, and central bank officials will next meet on Oct. 30.
Today’s gathering was attended by Japanese Economy Minister Seiji Maehara, the first minister to do so for more than nine years. Maehara said he went to the BOJ to express his concern about yen appreciation and prolonged deflation.
ECB President Draghi said yesterday the bank is ready to undertake Outright Monetary Transactions “once all the prerequisites are in place.” He spoke at a press conference in Ljubljana, Slovenia, after policy makers left the benchmark rate at a historic low of 0.75 percent.
“The ECB’s bond-buying decision has been welcomed by the markets,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency margin company. “The risk-averse trade has been receded and we’re seeing a firmer euro.”
Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.
Spain is still mulling whether it wants to accept the conditions attached to an aid request. Prime Minister Mariano Rajoy denied this week reports that a rescue request was imminent, while Economy Minister Luis de Guindos said yesterday no bailout was needed.
German factory orders in Europe’s largest economy slid 0.5 percent in August from the previous month, according to the median economist estimate in a survey by Bloomberg News.
U.S. payrolls rose by 115,000 in September, up from 96,000 in the prior month, according to economists in another survey before the Labor Department data today. The jobless rate is estimated to be 8.2 percent, compared with 8.1 percent in August.
Fed Chairman Ben S. Bernanke this week defended the central bank’s unprecedented bond buying announced last month, saying officials will sustain record stimulus even after the domestic expansion gains strength. The Fed said on Sept. 13 it will keep the main interest rate near zero until at least mid-2015 and buy $40 billion of mortgage debt a month in a third round of quantitative easing.
“A weaker-than-expected payrolls figure will put downward pressure on the U.S. dollar as markets start to speculate on added QE purchases,” Credit Agricole (ACA) CIB analyst Sireen Harajli wrote in a report today. “A better-than-expected figure will continue today’s increase for risk appetite.”
The currencies of Australia and New Zealand rose along with Asian stocks. The so-called Aussie added 0.1 percent to $1.0251 and New Zealand’s dollar climbed 0.3 percent to 82.39 U.S. cents. The MSCI Asia Pacific Index (MXAP) of shares climbed 0.4 percent.
To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
The yen strengthened versus most of its 16 major counterparts and pared a weekly decline versus the dollar, after BOJ officials kept the bank’s asset-purchase fund, its main policy tool, unchanged. The euro was 0.2 percent from a two-week high after European Central Bank President Mario Draghi said the bank is ready to start buying government bonds as part of a program to help ease borrowing costs for the region’s debt- ridden nations.
“The BOJ’s inaction disappointed the market a little bit,” said Minori Uchida, chief analyst at Bank of Tokyo- Mitsubishi UFJ Ltd. Tokyo. “There’s some unwinding of yen selling.”
The yen gained 0.1 percent to 78.39 per dollar at 8:44 a.m. London time. It touched 78.72 yesterday, the weakest since Sept. 19. It rose 0.3 percent to 101.94 per euro, snapping a six-day slide. Europe’s shared currency was little changed at $1.3002. It reached $1.3032 yesterday, the strongest since Sept. 21.
Against the greenback, the euro has advanced 1.1 percent since Sept. 28 and the yen is headed for a 0.6 percent slide.
The BOJ said today in a statement that its bond-buying program will remain at 55 trillion yen. The outcome was expected by all 20 economists surveyed by Bloomberg News, and central bank officials will next meet on Oct. 30.
Today’s gathering was attended by Japanese Economy Minister Seiji Maehara, the first minister to do so for more than nine years. Maehara said he went to the BOJ to express his concern about yen appreciation and prolonged deflation.
Worst Performer
The yen has weakened 6.2 percent in the past 12 months, the biggest decline among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro fell 4.9 percent and the dollar lost 2.5 percent in the same period.ECB President Draghi said yesterday the bank is ready to undertake Outright Monetary Transactions “once all the prerequisites are in place.” He spoke at a press conference in Ljubljana, Slovenia, after policy makers left the benchmark rate at a historic low of 0.75 percent.
“The ECB’s bond-buying decision has been welcomed by the markets,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency margin company. “The risk-averse trade has been receded and we’re seeing a firmer euro.”
Fibonacci Test
The euro may test $1.3031, the 61.8 percent Fibonacci retracement level of its decline from a high of $1.3172 on Sept. 17 to a low of $1.2804 on Oct. 1, according to UBS AG. Momentum indicators for the currency have climbed, “reflecting a bullish trend condition,” Richard Adcock, London-based head of fixed- income technical strategy at UBS, wrote in a report today.Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.
Spain is still mulling whether it wants to accept the conditions attached to an aid request. Prime Minister Mariano Rajoy denied this week reports that a rescue request was imminent, while Economy Minister Luis de Guindos said yesterday no bailout was needed.
German factory orders in Europe’s largest economy slid 0.5 percent in August from the previous month, according to the median economist estimate in a survey by Bloomberg News.
Easing Sustained
The dollar slid versus most of its major peers this week on prospects the Federal Reserve will continue measures supporting growth and employment.U.S. payrolls rose by 115,000 in September, up from 96,000 in the prior month, according to economists in another survey before the Labor Department data today. The jobless rate is estimated to be 8.2 percent, compared with 8.1 percent in August.
Fed Chairman Ben S. Bernanke this week defended the central bank’s unprecedented bond buying announced last month, saying officials will sustain record stimulus even after the domestic expansion gains strength. The Fed said on Sept. 13 it will keep the main interest rate near zero until at least mid-2015 and buy $40 billion of mortgage debt a month in a third round of quantitative easing.
“A weaker-than-expected payrolls figure will put downward pressure on the U.S. dollar as markets start to speculate on added QE purchases,” Credit Agricole (ACA) CIB analyst Sireen Harajli wrote in a report today. “A better-than-expected figure will continue today’s increase for risk appetite.”
The currencies of Australia and New Zealand rose along with Asian stocks. The so-called Aussie added 0.1 percent to $1.0251 and New Zealand’s dollar climbed 0.3 percent to 82.39 U.S. cents. The MSCI Asia Pacific Index (MXAP) of shares climbed 0.4 percent.
To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
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