By Kristine Aquino -
Nov 23, 2012 10:24 AM GMT+0800
The yen climbed versus most of its
16 major peers as technical indicators signaled its recent drop
may have been too rapid and as a contraction in euro-area
manufacturing and services damped global growth prospects.
Japan’s currency pared a weekly decline that comes as opposition leader Shinzo Abe, who is favored to become the country’s next prime minister after elections on Dec. 16, increased pressure on the Bank of Japan (8301) to add to stimulus measures that tend to weaken the yen. The euro traded near its highest level in three weeks on prospects finance ministers will agree on an aid package for Greece next week, even after a report showed the region slipped back into a recession.
“Some investors may think the recent rally in dollar-yen has been a bit over-extended and it’s time for a bit of a correction,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “We’ve recently got confirmation of a technical recession in the euro zone, so going ahead things are still pretty uncertain.”
The yen rose 0.1 percent to 82.37 per dollar as of 9:30 a.m. in Singapore after touching 82.84 yesterday, the weakest since April 4. It added 0.2 percent to 106.09 per euro. Europe’s shared currency bought $1.2880 from $1.2884 yesterday, when it climbed to $1.2899, the highest since Nov. 2.
The yen is set for a 1.3 percent drop versus its U.S. counterpart this week. The euro advanced 1.1 percent against the greenback since Nov. 16.
A composite index based on a survey of purchasing managers in manufacturing and services in the euro zone was little changed at 45.8 compared with 45.7 in October, London-based Markit Economics said yesterday. A report last week showed gross domestic product slipped for a second-straight period in the third quarter, the first consecutive drop since 2009.
Japan’s Abe, who heads the opposition Liberal Democratic Party, said intervention to weaken the yen is not effective, especially if the country acts alone in the currency market, the Wall Street Journal reported today, citing an interview yesterday. The BOJ should work to increase the nation’s monetary base and set a clear inflation target, the newspaper quoted Abe as saying.
Abe’s party pledged this week to achieve nominal economic growth of 3 percent and set an inflation target with the central bank of 2 percent should it win the Dec. 16 elections in the lower house of parliament.
To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net
To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net
Japan’s currency pared a weekly decline that comes as opposition leader Shinzo Abe, who is favored to become the country’s next prime minister after elections on Dec. 16, increased pressure on the Bank of Japan (8301) to add to stimulus measures that tend to weaken the yen. The euro traded near its highest level in three weeks on prospects finance ministers will agree on an aid package for Greece next week, even after a report showed the region slipped back into a recession.
“Some investors may think the recent rally in dollar-yen has been a bit over-extended and it’s time for a bit of a correction,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “We’ve recently got confirmation of a technical recession in the euro zone, so going ahead things are still pretty uncertain.”
The yen rose 0.1 percent to 82.37 per dollar as of 9:30 a.m. in Singapore after touching 82.84 yesterday, the weakest since April 4. It added 0.2 percent to 106.09 per euro. Europe’s shared currency bought $1.2880 from $1.2884 yesterday, when it climbed to $1.2899, the highest since Nov. 2.
The yen is set for a 1.3 percent drop versus its U.S. counterpart this week. The euro advanced 1.1 percent against the greenback since Nov. 16.
Relative Strength
The yen was supported as technical indicators signaled its recent decline may have been too rapid. The currency’s 14-day relative strength index against the dollar was at 26, its fifth- straight day below the 30 level that some traders see as a sign an asset is about to change direction. Against the euro, it was at 32.A composite index based on a survey of purchasing managers in manufacturing and services in the euro zone was little changed at 45.8 compared with 45.7 in October, London-based Markit Economics said yesterday. A report last week showed gross domestic product slipped for a second-straight period in the third quarter, the first consecutive drop since 2009.
Japan’s Abe, who heads the opposition Liberal Democratic Party, said intervention to weaken the yen is not effective, especially if the country acts alone in the currency market, the Wall Street Journal reported today, citing an interview yesterday. The BOJ should work to increase the nation’s monetary base and set a clear inflation target, the newspaper quoted Abe as saying.
Abe’s party pledged this week to achieve nominal economic growth of 3 percent and set an inflation target with the central bank of 2 percent should it win the Dec. 16 elections in the lower house of parliament.
To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net
To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net
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