By Kristine Aquino and Mariko Ishikawa -
Oct 18, 2012 12:44 PM GMT+0800
The yen touched the weakest level in
a month as Asian stock gains and optimism European Union leaders
meeting today in Brussels will take steps toward resolving the
euro area’s crisis curbed demand for haven assets.
Japan’s currency slid versus all 16 major counterparts as expectations increased the country’s central bank will boost stimulus measures at a meeting on Oct. 30 and the extra yield investors receive from U.S. debt held near the highest in a month, damping the allure the yen. Australia’s dollar reached the strongest in more than two weeks after a report showed China’s economic growth matched economist estimates.
“Risk appetite is helping the underperformance in the yen,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. (WBC) in Singapore. Today’s data indicates “the Chinese economy into the end of third quarter is on reasonable footing and from that perspective, that suggests risk appetite remains supported on dips.”
The yen touched 79.22 per dollar, the weakest since Sept. 19, before trading at 79.13 per dollar as of 1:42 p.m. in Tokyo, 0.2 percent below yesterday’s close. The Japanese currency was at 103.62 per euro from 103.56 yesterday. It earlier reached 103.85, the weakest since Sept. 17. Europe’s shared currency bought $1.3096 from $1.3119 yesterday, when it reached $1.3140, the strongest since Sept. 17.
The MSCI Asia Pacific Index of shares climbed 0.8 percent.
“We need to begin to execute these things, rapidly,” Hollande said in a joint interview published yesterday by six European newspapers. “Europe can’t afford to be late any more.” Hollande and his 26 counterparts from other EU nations will begin a two-day summit today.
In Japan, central bank board members will release updated economic projections for the 2012 and 2013 fiscal years at month-end, along with the first set of forecasts for the 12 months beginning in April 2014. The estimates will probably show consumer prices, excluding fresh food, rising less than 1 percent, people familiar with the matter said, on condition of anonymity because the discussions are private. That would mark a failure for the Bank of Japan (8301) in meeting its 1 percent inflation goal.
At their last meeting that ended on Oct. 5, BOJ officials held off from more easing after adding to stimulus in September.
“Easing concern about the U.S. economy is also boosting appetite for riskier assets, driving Treasury yields and dollar- yen higher,” said Junichi Ishikawa, an analyst at IG Markets in Tokyo.
U.S. government debt fell yesterday after Commerce Department figures showed new home construction surged to the highest level in four years, reducing demand for the relative safety of Treasuries. A report today will probably show initial jobless claims in the world’s biggest economy rose to 365,000 last week from 339,000 in the previous period, according to the median forecast among 49 economists surveyed by Bloomberg News.
The Australian dollar strengthened after China’s statistics bureau said today gross domestic product rose 7.4 percent in the three months ended Sept. 30 from a year earlier, matching the median estimate of economists surveyed by Bloomberg before the report was released. China is Australia’s largest trading partner.
The so-called Aussie climbed as much as 0.1 percent to $1.0397, the highest since Oct. 1, before trading at $1.0384.
To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
Japan’s currency slid versus all 16 major counterparts as expectations increased the country’s central bank will boost stimulus measures at a meeting on Oct. 30 and the extra yield investors receive from U.S. debt held near the highest in a month, damping the allure the yen. Australia’s dollar reached the strongest in more than two weeks after a report showed China’s economic growth matched economist estimates.
“Risk appetite is helping the underperformance in the yen,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. (WBC) in Singapore. Today’s data indicates “the Chinese economy into the end of third quarter is on reasonable footing and from that perspective, that suggests risk appetite remains supported on dips.”
The yen touched 79.22 per dollar, the weakest since Sept. 19, before trading at 79.13 per dollar as of 1:42 p.m. in Tokyo, 0.2 percent below yesterday’s close. The Japanese currency was at 103.62 per euro from 103.56 yesterday. It earlier reached 103.85, the weakest since Sept. 17. Europe’s shared currency bought $1.3096 from $1.3119 yesterday, when it reached $1.3140, the strongest since Sept. 17.
The MSCI Asia Pacific Index of shares climbed 0.8 percent.
Execute Rapidly
France’s President Francois Hollande called on the EU to press ahead on forming a banking union, provide economic help to countries that rein in budget deficits, and show investors that Greece will be able to stay in the euro zone if it keeps its commitments.“We need to begin to execute these things, rapidly,” Hollande said in a joint interview published yesterday by six European newspapers. “Europe can’t afford to be late any more.” Hollande and his 26 counterparts from other EU nations will begin a two-day summit today.
In Japan, central bank board members will release updated economic projections for the 2012 and 2013 fiscal years at month-end, along with the first set of forecasts for the 12 months beginning in April 2014. The estimates will probably show consumer prices, excluding fresh food, rising less than 1 percent, people familiar with the matter said, on condition of anonymity because the discussions are private. That would mark a failure for the Bank of Japan (8301) in meeting its 1 percent inflation goal.
At their last meeting that ended on Oct. 5, BOJ officials held off from more easing after adding to stimulus in September.
Premium Increases
The yen also weakened as the premium offered by 10-year U.S. notes over benchmark Japanese government bonds increased this week. The difference between the two rates was at 102 basis points today, near the 105 basis point gap yesterday that was the most since Sept. 14.“Easing concern about the U.S. economy is also boosting appetite for riskier assets, driving Treasury yields and dollar- yen higher,” said Junichi Ishikawa, an analyst at IG Markets in Tokyo.
U.S. government debt fell yesterday after Commerce Department figures showed new home construction surged to the highest level in four years, reducing demand for the relative safety of Treasuries. A report today will probably show initial jobless claims in the world’s biggest economy rose to 365,000 last week from 339,000 in the previous period, according to the median forecast among 49 economists surveyed by Bloomberg News.
Worst Performer
The yen has weakened 4.5 percent in the past three months, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar fell 4.1 percent, the second biggest decline, while the euro rose 3 percent.The Australian dollar strengthened after China’s statistics bureau said today gross domestic product rose 7.4 percent in the three months ended Sept. 30 from a year earlier, matching the median estimate of economists surveyed by Bloomberg before the report was released. China is Australia’s largest trading partner.
The so-called Aussie climbed as much as 0.1 percent to $1.0397, the highest since Oct. 1, before trading at $1.0384.
To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
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