Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

CURRENCIES: Dollar Resumes Run Toward Yen100 Level

04/22/2013 | 10:27am US/Eastern
Recommend:
0

By Saumya Vaishampayan and William L. Watts, MarketWatch

NEW YORK (MarketWatch) -- The U.S. dollar came within a whisker of hitting the psychologically important 100-yen level Monday after officials from the Group of 20 economies offered no objections to Japan's aggressive stimulus measures.

The dollar (USDJPY) rose as high as Yen99.89 and changed hands in recent action at Yen99.53, on par with Friday's Yen99.52 in late North American trade. The dollar hasn't traded above Yen100 since April 2009.

"Despite the lack of criticism from the G-20, the market hasn't gone through the 100 level yet. I would say that as it keeps holding, it becomes more and more important of a technical level," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

Monday's decline in the yen drove Japan's Nikkei Stock Average higher, as a weaker yen provides a competitive boost to Japanese exporters.

The dollar on Friday climbed more than 1% against the yen after the Group of 20 major economies said Japan's recent monetary-policy actions are aimed at ending long-running deflation and supporting domestic demand, rather than accusing it of competitive devaluation.

"We think the [dollar/yen] currency pair is likely to trade above 100 (yen) in the near term as Japanese investors start to shift more funds abroad and expect the yen to weaken to 110 by year end," said Syed Mansoor Mohi-uddin, currency strategist at UBS.

The dollar had jumped close to the Yen100 level in the days after the Bank of Japan's April 3 announcement of a two-year campaign to defeat deflation in the country's stagnant economy. The dollar had traded at Yen92.89 just before the announcement.

However, the greenback ran into resistance at the psychologically important Yen100 level, which it hasn't crossed since April 2009, according to FactSet data.

Bank of Japan Gov. Haruhiko Kuroda reportedly told Japan's upper house budget committee Monday that, last week in Washington, he explained to the G-20 that the Japanese central bank's monetary-easing plan was aimed squarely at achieving its target of 2% consumer-price inflation.

"No one is prepared to get in Japan's way when it comes to Abenomics and their goal of creating inflation," said Douglas Borthwick, New York-based head of foreign exchange at Chapdelaine & Co., referring to Japan's monetary and fiscal initiatives pushed by Prime Minister Shinzo Abe.

"The global hope is that inflation will drive growth in Japan, finally awaking this sleeping giant. [Yen] weakness is now a given -- the only uncertainty is the pace at which this unfolds," Borthwick said.

The euro (EURJPY) changed hands at Yen129.67,off from Yen130.09 on Friday.

This week, investors will look for any further comments from the Bank of Japan in its next policy announcement, due Friday.

Investors will also watch closely for purchasing managers' index data from the euro zone and China due Tuesday. Also important this week are GDP numbers from the United Kingdom and the U.S.

Euro slips, sterling steady

Euro-zone PMI data for March showed the region's service sector shrank at its fastest pace since late 2012, yet another troubling sign of the euro zone sinking deeper into a recession. Tuesday's data could further confirm that trend.

Against the dollar, the euro (EURUSD) fetched $1.3030 on Monday, down from $1.3108 late Friday in North America.

The euro had pushed above $1.31 on Friday after Bundesbank President Jens Weidmann said the European Central Bank would only cut rates if economic data further deteriorated. Weidmann is a member of the ECB Governing Council.

In other major pairs, the British pound (GBPUSD) traded at $1.5242, little changed from Friday when the currency fell after Fitch Ratings cut the United Kingdom's long-term issuer default rating to AA+ from AAA.

The Australian dollar (AUDUSD) was at $1.0251, down from $1.0343 late Friday.

The ICE dollar index (DXY), a measure of the dollar against a basket of six other major currencies, edged up to 82.842 from 82.731 on Friday.

The WSJ Dollar Index , a rival gauge that uses a slightly larger basket, rose to 74.08 from a close Friday at 73.76.

Recommend :
0
React to this article
Latest news
Date Title
1m ago RESEARCH AND MARKETS : Wind Turbine Gearbox and Direct-Drive Systems, 2014 Update - Global Market Size, Gearbox Refurbishments, Competitive Landscape and Key Country Analysis to 2020
2m ago EXCLUSIVE : Asian buyers of U.S. LNG dial back as exuberance dims
3m ago NIKE : Chinese fans tout Li Na as tennis pioneer
4m ago RYANAIR : Signs Flight Data Partnership With Navtech
4m ago UOL : Asset acquisitions and disposals
4m ago MAGNUM ENTERTAINMENT : Poll results of the annual general meeting held on 19 september 2014
4m ago KENYA COMMERCIAL BANK : Shilling firms after CBK sells dollars for second day
4m ago GOOGLE 'C' : Review: Larger iPhones eliminate reason to switch
5m ago Italian luxury group Prada's first-half profit down 20.6 percent
5m ago Scottish 'No' means Bank of England can move ahead with hike - Jakobsen
Latest news
Advertisement
Hot News 
BANCO ESPIRITO SANTO : Swiss begin bankruptcy proceedings against Espirito Santo private bank
NORTHERN PETROLEUM : Appointment of joint broker
BAYER : plans huge float of its plastics business
CVS : Lifts Annual Dividend 25% As Profit, Revenues Surge
RM2 : Posts First Revenue But Loss Widens
Most Read News
1d ago INTEL : Tapping the growing tablet market
1d ago HOME DEPOT : breach bigger than Target at 56 million cards
1d ago ORACLE : Ellison steps aside, co-CEOs Catz and Hurd take over
1d ago JETBLUE AIRWAYS : names former British Airways exec CEO, shares rise
3h ago Relief for Europe as Scotland stays put
Most recommended articles
1m ago EXCLUSIVE : Asian buyers of U.S. LNG dial back as exuberance dims
4m ago Italian luxury group Prada's first-half profit down 20.6 percent
4m ago Scottish 'No' means Bank of England can move ahead with hike - Jakobsen
7m ago GM's Cadillac to introduce high-end model
9m agoDJReshuffle Russian Government, Says Former Finance Minister
Dynamic quotes  
ON
| OFF