Yen hits record low against euro in Asia
Tuesday, 10 July 2007
TOKYO, July 9 (AFP): The yen dropped to a record low against the euro in Asian trade today, failing to draw strength from a stronger- than-expected report on Japanese machinery orders, dealers said.
They said the Japanese currency continued to be pressured by investors sending money from Japan overseas in search of higher returns.
The euro rose to 168.36 yen in Tokyo afternoon trade, up from 168.10 late Friday in New York.
The dollar firmed to 123.67 yen from 123.34. The euro was lower at 1.3616 dollars after 1.3626 but still within sight of its April record of 1.3682.
The Japanese currency remained under pressure despite news of a 5.9 per cent jump in domestic private-sector machinery orders in May that was much better than the 2.6 per cent gain expected by the market.
"The surprisingly strong figure increased expectations slightly that the Bank of Japan will raise interest rates next month," said Kazuhiko Shibata, branch manager at Dresdner Bank in Tokyo.
But with interest rates in the 13-nation eurozone expected to rise in September to 4.25 per cent and prospects of a US rate cut fading, interest rate differentials continue to weigh on the yen, he added.
Market players are divided on whether the Japanese central bank will raise its key rate from 0.5 per cent next month.
The Bank of Japan holds a two-day monetary policy meeting through this Thursday and while it is not expected to make any move yet, players hope for some clues from governor Toshihiko Fukui on when the next hike might come.
The market is also gearing up for a speech by US Federal Reserve chairman Ben Bernanke Tuesday on the health of the economy, following Friday's strong US employment report.
The dollar edged down to 32.841 Taiwan dollars in late Asian trade from 32.842 Friday, to 46.06 Philippine pesos from 46.15, to 9,022.5 Indonesian rupiah from 9,030 and to 1.5194 Singapore dollars from 1.5202.
The unit rose to 920.70 South Korean won from 919.85 and to 31.76 Thai baht from 31.20.
They said the Japanese currency continued to be pressured by investors sending money from Japan overseas in search of higher returns.
The euro rose to 168.36 yen in Tokyo afternoon trade, up from 168.10 late Friday in New York.
The dollar firmed to 123.67 yen from 123.34. The euro was lower at 1.3616 dollars after 1.3626 but still within sight of its April record of 1.3682.
The Japanese currency remained under pressure despite news of a 5.9 per cent jump in domestic private-sector machinery orders in May that was much better than the 2.6 per cent gain expected by the market.
"The surprisingly strong figure increased expectations slightly that the Bank of Japan will raise interest rates next month," said Kazuhiko Shibata, branch manager at Dresdner Bank in Tokyo.
But with interest rates in the 13-nation eurozone expected to rise in September to 4.25 per cent and prospects of a US rate cut fading, interest rate differentials continue to weigh on the yen, he added.
Market players are divided on whether the Japanese central bank will raise its key rate from 0.5 per cent next month.
The Bank of Japan holds a two-day monetary policy meeting through this Thursday and while it is not expected to make any move yet, players hope for some clues from governor Toshihiko Fukui on when the next hike might come.
The market is also gearing up for a speech by US Federal Reserve chairman Ben Bernanke Tuesday on the health of the economy, following Friday's strong US employment report.
The dollar edged down to 32.841 Taiwan dollars in late Asian trade from 32.842 Friday, to 46.06 Philippine pesos from 46.15, to 9,022.5 Indonesian rupiah from 9,030 and to 1.5194 Singapore dollars from 1.5202.
The unit rose to 920.70 South Korean won from 919.85 and to 31.76 Thai baht from 31.20.