Yen remains at multi-year lows
Friday, 22 June 2007
TOKYO, June 21 (AFP): The yen remained in a multi-year trough against major currencies in Asian trade today as rising interest rates elsewhere emboldened traders to buy higher- yielding units with the cheap yen, dealers said.
The dollar firmed to 123.65 yen in Tokyo afternoon trade from 123.53 late Wednesday in New York, remaining at a four-and- a- half-year high against the Japanese currency.
The euro eased to 1.3394 dollars from 1.3404 and to 165.55 yen from 165.60.
The pound sterling slipped to 1.9911 dollars from 1.9929 and hovered near a 15-year high against the yen at 246.22 from 246.51 in New York.
"The yen overall remains cheaper against other currencies and the interest rate gap is continuing to expand," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
"Even Japanese investors are selling the yen," he added.
The pound had gained against the dollar and the yen after minutes revealed four of the nine members on the Bank of England Monetary Policy Committee, including Governor Mervyn King, voted for a rate hike in June, making the decision to hold the rate unchanged a far closer one than markets had believed.
Market participants now predict that a further quarter-point hike to 5.75 percent would come at the bank's next policy meeting in July, dealers said.
The Bank of Japan "is also in a direction of raising interest rates but it seems difficult to close the gap with central banks in the eurozone and elsewhere in Europe which are poised to raise rates further," Matsumoto said.
"Unless there are huge negative factors, I think the possibility of an August rate hike is still high," Matsumoto said.
The dollar was mixed against other Asian currencies.
The dollar firmed to 1.5376 Singapore dollars from 1.5359, to 8,935 Indonesian rupiah from 8,905 and to 32.38 Thai baht from 32.22.
The greenback softened to 32.948 Taiwan dollars from 33.087 and to 926.10 South Korean from 927.80.
It stayed flat at 45.90 Philippine pesos.
The dollar firmed to 123.65 yen in Tokyo afternoon trade from 123.53 late Wednesday in New York, remaining at a four-and- a- half-year high against the Japanese currency.
The euro eased to 1.3394 dollars from 1.3404 and to 165.55 yen from 165.60.
The pound sterling slipped to 1.9911 dollars from 1.9929 and hovered near a 15-year high against the yen at 246.22 from 246.51 in New York.
"The yen overall remains cheaper against other currencies and the interest rate gap is continuing to expand," said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
"Even Japanese investors are selling the yen," he added.
The pound had gained against the dollar and the yen after minutes revealed four of the nine members on the Bank of England Monetary Policy Committee, including Governor Mervyn King, voted for a rate hike in June, making the decision to hold the rate unchanged a far closer one than markets had believed.
Market participants now predict that a further quarter-point hike to 5.75 percent would come at the bank's next policy meeting in July, dealers said.
The Bank of Japan "is also in a direction of raising interest rates but it seems difficult to close the gap with central banks in the eurozone and elsewhere in Europe which are poised to raise rates further," Matsumoto said.
"Unless there are huge negative factors, I think the possibility of an August rate hike is still high," Matsumoto said.
The dollar was mixed against other Asian currencies.
The dollar firmed to 1.5376 Singapore dollars from 1.5359, to 8,935 Indonesian rupiah from 8,905 and to 32.38 Thai baht from 32.22.
The greenback softened to 32.948 Taiwan dollars from 33.087 and to 926.10 South Korean from 927.80.
It stayed flat at 45.90 Philippine pesos.