Yen falls to new lows against euro, dollar
Wednesday, 20 June 2007
TOKYO, June 19 (AFP): The yen fell today to another low against the euro and a four-and-a-half-year trough against the dollar on expectations that Japanese interest rates will stay well below those in other major economies, dealers said.
At one point, the euro hit an all-time high of 166.08 yen, up from 165.90 yen late Monday in New York. In afternoon trade, the single European currency stood at 165.88 yen and at 1.3426 dollars, compared with 1.3414 dollars in New York.
The dollar was quoted at 123.56 yen, just off a four-and-a- half year high last seen in December 2002 when it hit 123.66. Earlier in the morning the unit jumped as high as 123.73 yen.
The yen remained under pressure as the carry trade-under which investors borrow yen to take advantage of Japan's super-low interest rates and then head to higher-yielding markets-showed no signs of abating.
The Bank of Japan last week unanimously kept its benchmark rate at 0.5 percent and gave no sign it was in any hurry to raise it.
"There is a sense of confidence among investors-particularly individual investors and funds-towards yen- selling and the global sentiment is that the BoJ will not raise rates imminently," said Yoshifumi Suzuki, forex strategist at Hachijuni Bank.
The market expects little movement before next month's elections, a key test for Prime Minister Shinzo Abe who is struggling in the polls.
The Japanese central bank "is probably conscious of the turmoil with the Abe government, which is pressuring it to hold rates (unchanged)," Suzuki said.
Market players were also waiting for Germany's ZEW business sentiment survey due out later Tuesday amid robust growth in the eurozone.
"We are putting 170 yen to the euro in our sights," Suzuki said.
The dollar was mixed against other Asian currencies.
It rose to 1.5378 Singapore dollars from 1.5374 on Monday, to 33.143 Taiwan dollars from 33.141 and to 45.93 Philippine pesos from 46.72.
The greenback fell to 927.15 South Korean won from 927.40 and to 8,915 Indonesian rupiah from 9,040 and to 32.30 Thai baht from 32.58.
At one point, the euro hit an all-time high of 166.08 yen, up from 165.90 yen late Monday in New York. In afternoon trade, the single European currency stood at 165.88 yen and at 1.3426 dollars, compared with 1.3414 dollars in New York.
The dollar was quoted at 123.56 yen, just off a four-and-a- half year high last seen in December 2002 when it hit 123.66. Earlier in the morning the unit jumped as high as 123.73 yen.
The yen remained under pressure as the carry trade-under which investors borrow yen to take advantage of Japan's super-low interest rates and then head to higher-yielding markets-showed no signs of abating.
The Bank of Japan last week unanimously kept its benchmark rate at 0.5 percent and gave no sign it was in any hurry to raise it.
"There is a sense of confidence among investors-particularly individual investors and funds-towards yen- selling and the global sentiment is that the BoJ will not raise rates imminently," said Yoshifumi Suzuki, forex strategist at Hachijuni Bank.
The market expects little movement before next month's elections, a key test for Prime Minister Shinzo Abe who is struggling in the polls.
The Japanese central bank "is probably conscious of the turmoil with the Abe government, which is pressuring it to hold rates (unchanged)," Suzuki said.
Market players were also waiting for Germany's ZEW business sentiment survey due out later Tuesday amid robust growth in the eurozone.
"We are putting 170 yen to the euro in our sights," Suzuki said.
The dollar was mixed against other Asian currencies.
It rose to 1.5378 Singapore dollars from 1.5374 on Monday, to 33.143 Taiwan dollars from 33.141 and to 45.93 Philippine pesos from 46.72.
The greenback fell to 927.15 South Korean won from 927.40 and to 8,915 Indonesian rupiah from 9,040 and to 32.30 Thai baht from 32.58.