雅虎香港財經 Yen Is Under Pressure Even as Japan Steps Up Its Verbal Warnings
(Bloomberg) -- The yen remained under pressure even after Japan’s top currency official warned that authorities stand ready to intervene in currency markets 24 hours a day if necessary.
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“If there are excessive currency fluctuations, it has a negative impact on the national economy,” said Vice Finance Minister Masato Kanda. “In the event of excessive moves based on speculation, we are prepared to take appropriate action.”
Kanda’s comments had minimal impact, with the yen hovering in a tight range, just shy of the psychological level of 160 per dollar into the New York session and not far from the weakest level in about 34 years.
With benchmark interest rates in Japan still barely above zero, and those in the US yet to be cut, the yawning yield gap between the two nations means the yen is vulnerable to further declines. The yen is faring little better against its European peer, trading just a fraction stronger than a record low of 171.56 per euro last reached in April.
At Bank of America, strategists led by Shusuke Yamada now forecast the yen weakening to 163 against the dollar by September. They see the 165 level offering a new “line in the sand” that will add pressure on Japanese authorities to prop up the currency.
The market remains on edge as the threat of intervention looms. At one point in London trading, the yen surged sharply, rising as much as 0.6% against the dollar before paring its advance. As of 4 p.m. in New York, the currency was some 0.1% stronger at 159.64 per dollar.
Brown Brothers Harriman Senior Markets Strategist Elias Haddad said the sharp move in London trading appeared “too shallow to imply BOJ stepped-in,” adding a likely intervention zone for the yen is instead around 160 to 165 per dollar.
The yen remains within easy striking distance of the 160.17 mark set on April 29, when Japan is thought to have waded into the market to stem losses. The vast bulk of the gains made in the yen since the suspected intervention on that day and on May 1 have now been lost despite record amounts spent by Japan.
Japan has acknowledged that it spent ¥9.8 trillion ($61.3 billion) intervening in currency markets during the period from April 26 to May 29. Authorities haven’t specified the dates when the Bank of Japan was ordered to take action, but trading patterns indicate there were two major rounds of intervention on April 29 and May 1. Foreign reserves data indicate that Japan likely sold Treasuries to help fund that action.
“We suspect, the next round of BOJ intervention is likely to come after USD/JPY triggers buy orders perched above the late April 160.20ish high,” wrote Tony Sycamore, market analyst at IG Australia. He said the yen’s decline against the dollar last week was driven by stronger-than-expected US purchasing managers index data and the BOJ’s reluctance to provide a detailed plan around its reduction of bond purchases.
The BOJ could make more sizable cuts in bond buying after checking the view of market participants, one member of the policy board said at this month’s meeting, according to a summary of opinions issued Monday. One member said the BOJ needs to consider further adjustment of monetary easing as there are upside risks for inflation.
The pace of currency moves is also important to Japanese officials and by this measure it may not be enough to trigger immediate intervention. A gauge measuring the dollar-yen’s move from the lowest level seen in the past 28 days to Monday’s high rose to ¥6.32, which is some ¥3.7 below moves of 10-yen that Kanda has previously described as “rapid.” This suggests that speculation of an intervention may intensify when the currency pair reaches 163.
In the currency options market, the premium to hedge against a yen rise against the dollar compared with a slide in the Japanese currency declined for a fifth day, reflecting traders’ expectations that the yen still has room to weaken.
Currency speculators, meanwhile, continue to pile in to bearish bets against the yen. Asset managers held some 85,600 contracts tied to wagers against the Japanese currency in the week ending June 18 — the most on record in Commodity Futures Trading Commission data going back to 2006.
Global authorities are in touch with each other on a daily basis on a wide range of issues including currencies, Kanda said. The market is paying attention to currency levels, and there’s a strong sense of caution about foreign exchange intervention, the Japanese official said.
Kanda’s boss, Finance Minister Shunichi Suzuki, underscored Japan’s stance on the yen on Monday. The government was watching foreign exchange moves closely and would take appropriate measures against excessive currency moves if necessary, he said.
Kanda said his counterparts in Washington don’t have a problem with Japan’s intervention. “The most important thing for them is transparency,” he said. Kanda said a decision by the US to add Japan to its currency watchlist had no impact on Japan’s currency strategy.
--With assistance from Naomi Tajitsu, Masaki Kondo, Michael G. Wilson, Daisuke Sakai, Alice Atkins, Sujata Rao, Constantine Courcoulas and Carter Johnson.
(Updates prices throughout; adds CFTC data in 14th paragraph.)
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