Yen Heads for Biggest Drop Against Euro in Five Years on Rates
Yen Heads for Biggest Drop Against Euro in Five Years on Rates
by takeshitsai on Mon Jun 30, 2008 2:09 pm
The yen headed for its biggest quarterly decline against the euro in five years on speculation the Bank of Japan will keep interest rates on hold, while the European Central Bank prepares to raise borrowing costs.
Japan's currency headed for its largest quarter of losses against the dollar since 2001 before the BOJ's quarterly Tankan survey tomorrow that will probably show business confidence slumped to the lowest in almost five years. The yen pared losses after Japan had its debt rating raised one level to Aa3 by Moody's Investors Service, which said the government will keep trying to restrain spending to reduce debt.
``Demand for overseas assets with higher yields is pushing the yen lower,'' said Koichi Yoshikawa, head of currency trading at BNP Paribas in Tokyo. ``It would be nonsense for the BOJ to raise rates. That increases the appeal of the euro and other currencies.''
The yen traded at 167.40 against the euro at 2:01 p.m. in Tokyo from 167.58 late in New York on June 27 and 157.40 on March 31. Against the dollar, it was at 106.00 from 106.13 last week and 99.69 last quarter. The dollar was quoted at $1.5789 against the euro, after falling to $1.5797, the lowest since June 9. The yen may fall to 168.30 against the euro and 106.60 per dollar today, Yoshikawa forecast.
The yen declined to 102.18 per Australian dollar from 101.99 in New York and to 81.01 against the New Zealand dollar from 80.75. The Aussie, as Australia's currency is known, climbed to 96.24 U.S. cents from 96.10 cents as prices of commodities the nation exports rose to records.
Yield Spread
The euro advanced 6.7 percent against the yen this quarter, the most since June 2003, on speculation the rate differential between the two currencies will expand. ECB policy makers will raise rates a quarter-percentage point to 4.25 percent when they meet July 3, according to a Bloomberg News survey of economists.
The yield spread on 10-year German government debt over similar-maturity Japanese notes widened to 2.91 percentage points, near a four-year high of 2.93 percentage points.
The yen pared a daily decline of as much as 0.3 percent after Moody's said Japanese banks had avoided the worst effects of the credit crisis.
``News on Moody's upgrade was a big surprise, triggering yen-buying,'' said Yuji Saito, head of foreign-exchange sales at Societe Generale SA in Tokyo. Even so, he added, ``we Japanese think the Fukuda administration is reluctant to cut spending and the Japanese economy is slowing.''
The yen may rise to 105.60 a dollar today, Saito said.
Japan's currency headed for its largest quarter of losses against the dollar since 2001 before the BOJ's quarterly Tankan survey tomorrow that will probably show business confidence slumped to the lowest in almost five years. The yen pared losses after Japan had its debt rating raised one level to Aa3 by Moody's Investors Service, which said the government will keep trying to restrain spending to reduce debt.
``Demand for overseas assets with higher yields is pushing the yen lower,'' said Koichi Yoshikawa, head of currency trading at BNP Paribas in Tokyo. ``It would be nonsense for the BOJ to raise rates. That increases the appeal of the euro and other currencies.''
The yen traded at 167.40 against the euro at 2:01 p.m. in Tokyo from 167.58 late in New York on June 27 and 157.40 on March 31. Against the dollar, it was at 106.00 from 106.13 last week and 99.69 last quarter. The dollar was quoted at $1.5789 against the euro, after falling to $1.5797, the lowest since June 9. The yen may fall to 168.30 against the euro and 106.60 per dollar today, Yoshikawa forecast.
The yen declined to 102.18 per Australian dollar from 101.99 in New York and to 81.01 against the New Zealand dollar from 80.75. The Aussie, as Australia's currency is known, climbed to 96.24 U.S. cents from 96.10 cents as prices of commodities the nation exports rose to records.
Yield Spread
The euro advanced 6.7 percent against the yen this quarter, the most since June 2003, on speculation the rate differential between the two currencies will expand. ECB policy makers will raise rates a quarter-percentage point to 4.25 percent when they meet July 3, according to a Bloomberg News survey of economists.
The yield spread on 10-year German government debt over similar-maturity Japanese notes widened to 2.91 percentage points, near a four-year high of 2.93 percentage points.
The yen pared a daily decline of as much as 0.3 percent after Moody's said Japanese banks had avoided the worst effects of the credit crisis.
``News on Moody's upgrade was a big surprise, triggering yen-buying,'' said Yuji Saito, head of foreign-exchange sales at Societe Generale SA in Tokyo. Even so, he added, ``we Japanese think the Fukuda administration is reluctant to cut spending and the Japanese economy is slowing.''
The yen may rise to 105.60 a dollar today, Saito said.
Moderator of World Top 10 Online Trading Platform
(千里馬外汇论坛版主) = 自我提升收入=自我提升生活素质
(千里馬外汇论坛版主) = 自我提升收入=自我提升生活素质
