The dollar slumped to 14-year lows against the yen yesterday, prompting expressions of alarm from Japan’s government as it battles to coax the world’s No. 2 economy back to health.
Japanese Finance Minister Hirohisa Fujii said the government was being “vigilant” and would take appropriate measures if currency rates “move abnormally” — although traders played down prospects for official intervention.
The greenback briefly dropped to ¥86.28, its lowest level since it traded at ¥84.92 on July 7, 1995. A stronger yen threatens the competitiveness of Japanese exporters just as the economy is slowly pulling out of a deep slump.
The dollar’s fall was driven by expectations that the US Federal Reserve will maintain its ultra-low interest rates for some time, sending investors in search of other higher-yielding assets, dealers said.
The US unit fell to a 15-month low against a basket of currencies including the euro, yen, pound and the Swiss franc. Its slide prompted gold prices to shoot up to record highs above US$1,195 an ounce.
The dollar’s woes have been exacerbated since Fed minutes on Tuesday indicated no change ahead for the low-rate regime and called the currency’s recent decline “orderly.”
“This yen strengthening is caused by dollar selling rather than yen buying, so this is not something Japan can handle by itself,” Mizuho Securities senior technical analyst Yutaka Miura said. “This trend will continue unless the Japanese government takes action, in cooperation with the US.”
The dollar’s fall sparked some speculation among traders that Tokyo may step into currency markets for the first time since 2004 to curb the yen’s ascent and so help Japanese exporting companies.
But most market watchers did not see Fujii’s remarks as suggesting that intervention was immediately on the horizon.
“Fujii’s comments highlighted the possibility of intervention on any further sharp falls, say below ¥85,” Satoshi Tate, senior vice president in the forex division of Mizuho Corporate Bank, told Dow Jones Newswires. “But at the same time, the comments did not convey a sense of real urgency, since they were essentially a repetition of the government’s typical line.”
Sumitomo Trust & Bank forex strategist Jitsuo Tachibana said: “Japan is unlikely to intervene in markets on its own, and would need to consult with other central banks in the world.”
A government minister and the bosses of two of Japan’s biggest business electronics groups expressed concern the stronger yen would hurt the export-led economy’s recovery from its worst post-war recession.
“The yen’s abrupt surge could have negative effects on the Japanese economy. I’m worried,” said Shizuka Kamei, the minister in charge of financial services.
Toshiba president Norio Sasaki said: “We would like coordination among governments to tackle rapid [currency] movements.”
Panasonic president Fumio Otsubo said: “We fear an underlying strong-yen direction in markets, and we are in an unpredictable situation.”
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
RSS