The dollar hit a 10 - day high
against the yen in overnight trading, but reversed that move, touching its session low after Dudley's remarks.
The yen's recovery was likely to be short - lived, and the dollar would rise
against the yen in the coming months, analysts said.
As the global economy deteriorated in 2008, the collapse in virtually all asset prices led to the unwinding of the yen carry trade, leading to it surging as much as 29 percent
against the yen in 2008, and 19 percent versus the US dollar by February 2009.
The obvious example is the slump in the US dollar
against the yen in 1998 as the hedge funds lost their credit lines from Japanese banks and were compelled to unwind their carry trades.
Not exact matches
It is the promise of «Abenomics» that has seen the
yen shed about 15 percent of its value
against the dollar since November and Japanese shares surge to their highest level
in more than four years.
For foreigners investing
in Japanese stocks, the
yen also poses a challenge, analysts said, with the rapid depreciation
in the currency — which has fallen 14 percent
against the U.S. dollar
in the past three months - mitigating gains
in the market.
LONDON, Feb 14 (Reuters)- The dollar hit a 15 - month low
against the
yen but steadied
against the euro on Wednesday, with investors nervous ahead of key U.S. inflation numbers due later amid a fragile recovery
in equity markets.
The
yen dove by more than 15 %
against the U.S. dollar
in three months.
The
yen has already gone down more than 16 percent
against the dollar since the beginning of the year, and it is now down 12 percent
in trade - weighted terms compared with the year before.
He also said that the Bank of Japan doesn't realize that the odds are stacked
against them because whenever there's a problem
in emerging markets, the
yen is seen as a safe haven, which causes it to strengthen.
The
yen has fallen about 11 %
against the U.S. dollar this year, and that's been great for exports, while inflation is the highest it's been
in five years.
The
yen traded near 108
against the greenback Monday morning, the Japanese currency's weakest level versus the dollar
in more than two months.
«There is a bit of a risk - off undertone to markets here,» said Shaun Osborne, currency strategist at Scotia Bank
in Toronto, referring to the
yen's performance
against the greenback.
LONDON, Feb 14 - The dollar hit a 15 - month low
against the
yen but steadied
against the euro on Wednesday, with investors nervous ahead of key U.S. inflation numbers due later amid a fragile recovery
in equity markets.
The
yen soared 1 percent
against the dollar and euro on Tuesday after the Bank of Japan said its open - ended commitment to buy assets would kick
in only next year, disappointing those who had expected more aggressive monetary easing.
In the currency markets, the differing messages of the world's major central banks on inflation and monetary policy prodded the dollar higher
against the
yen ahead of a series of appearances by U.S. Federal Reserve officials this week.
In the past six months, the euro has gained about 8 percent
against the dollar, 10 percent versus the British pound and soared 28 percent
against the
yen.
In the dying months of 2013 the
yen fell 8 %
against the U.S. dollar while the MSCI Japan index climbed 8 %.
«Trading into the Fed, the dollar could have a bounce, but if the tariffs come
in after that could take the dollar down
against the
yen,» Nordvig said.
The last time the G - 20 issued such a firm statement
against currency wars Japan was
in the spotlight as its campaign of monetary stimulus pushed the
yen to its lowest level
against the dollar
in about five years.
Specifically, the robust productivity growth achieved by the United States
in the 1990s explains three - quarters of the strengthening of the dollar
against the
yen and two - thirds of the dollar's appreciation
against the euro
in that decade.
The Japanese
yen is the overall winner
against the greenback, underpinned by another bad day
in Wall Street.
Elsewhere
in forex markets, it's a relatively calm day, with a slight correction
in the risk - off trade that we have been monitoring for weeks, as the
yen is a tad lower today
against all of its major peers, while the Dollar couldn't gain on risk - on currencies, despite the equity weakness.
It was unable to rally
against some early weakness
in the dollar (DX to 91.49) during Asian hours from some early strength
in the
yen (109.40 — 109.13, BOJ kept policy steady, removed time frame on reaching 2 % inflation target).
The US dollar
in 2000 has risen
against the currencies of all other industrial countries, although its rise
against the
yen has been relatively small.
Ultimately, we see the dollar weakening
against the euro as real rates
in the Euro Zone become more positive and strengthen versus the
yen because inflation
in Japan is picking up due to accelerating wage growth.
The
yen hit historic lows
against the U.S. dollar
in 2016, and though it had strengthened by December, it still was very low, spurring an increase
in international travel demand.
The
Yen is still on the move, after yesterday's short squeeze
in the USD / JPY, as the safe - haven currency regained some of the recently lost ground
against its peers.
As US consumer prices declined unexpectedly on a month - to - month basis, Treasury yields retreated, while the Dollar remained under pressure
against the Euro (although a break above 1.24 didn't happen
in the EUR / USD), while the safe - haven
Yen regained some of its recent losses
against the Greenback.
Conversely,
in a bull correction the U.S. dollar typically strengthens
against emerging market currencies and the
yen doesn't budge.
The rebound
in the
yen, which has caused a de facto tightening
in Japanese monetary conditions, creates a further headache for the Bank of Japan, as it continues its extensive quantitative easing program,
against an economic background
in which inflation indicators have remained sluggish.
As of today, the unemployment level maintains to the lowest levels since 2009, but any increase
in unemployment may weaken the European currency
against major pairs, including
Yen.
The Japanese
yen gained a slight 0.06 percent
against the US dollar at midday
in the Asian trading session on Wednesday.
The country's healthy trade surpluses and the Plaza Accord
in 1985, which sought to weaken the U.S. dollar
against the
Yen and German Deutsche Mark, caused the
Yen currency to appreciate
against other currencies, which
in turn made foreign capital investments relatively inexpensive for Japanese companies.
Elsewhere the Japanese
Yen slipped 0.06 % to ¥ 109.11
against the Dollar at the time of writing, easing geo - political risk and better than expected PMI numbers out of China supporting market risk appetite through the session, leading to a pullback
in demand for the safe havens.
During this period, the dollar reached a low of 102
against the
yen, and 1.365
against the euro — the lowest level since the latter's introduction
in 1999.
If the Dollar broke lower, its likely too that bonds and duration would rally; defensives (staples, utes, reits) and growth (tech / biotech / discret) squeeze
against crowded value unwinding (fins, energy, indus);
yen and euro would squeeze mightily; gold squeezes while copper pukes
in a favorite commodities «pair» unwind; HY could reverse weaker vs IG (currently everybody long CCC vs BB on the high beta trade)... this would be the theoretical path to our next pain - trade or even VaR shock.
In particular, the Australian dollar fell to around US63 cents by late August as investors moved out of the currency into the rapidly appreciating
yen; the bilateral rate
against the
yen fell from 82 to 70
yen over the same period.
In the December quarter, the US dollar declined by 8 per cent
against the euro, 7 per cent
against the
yen and 5 per cent on a broad trade - weighted basis.
In the final three months of last year the US dollar declined by 8 per cent against the euro and 7 per cent against the yen, to be around its lowest level in the past decad
In the final three months of last year the US dollar declined by 8 per cent
against the euro and 7 per cent
against the
yen, to be around its lowest level
in the past decad
in the past decade.
The
yen has been volatile over the past three months,
in net terms falling by 3 per cent
against the US dollar.
Overall, the data reflect anemic growth
in corporate capital investment, which may be constrained
in coming months by the recent appreciation
in the Japanese
yen against the dollar and by sluggish consumer demand, analysts said.
In case you've been living under a rock for the last few years, Japan's PM, Shinzo Abe's «Abenomics» (which is just Japan's colloquial term for our own QE that Bernanke put in motion), has caused the Yen to devalue by over 50 % against the dollar since the beginning of 201
In case you've been living under a rock for the last few years, Japan's PM, Shinzo Abe's «Abenomics» (which is just Japan's colloquial term for our own QE that Bernanke put
in motion), has caused the Yen to devalue by over 50 % against the dollar since the beginning of 201
in motion), has caused the
Yen to devalue by over 50 %
against the dollar since the beginning of 2013.
The greenback remained
in the 83 -
yen range, its strongest level
against the
yen since last April.
The USD is currently up 0.0006
against the euro, trading at 1.3339, after peaking at 1.3351 earlier
in the day, however it has slid
against a particularly strong
yen.
In the last week, the upcoming Japanese election has caused the
yen to fall
against a basket of other currencies.
-- Even though the Fed is not expecting a massive deterioration
in US inflation expectations, as the Fed lowered projections for rate hikes, the tendency is for dollar softness
against the
yen, which is poor for sentiment
in Japan, particularly for equity sentiment.
The bulk of this has been due to the exchange rate
against the Japanese
yen, as the
yen has fallen sharply on world markets, including a fall of about 50 per cent
against the US dollar from its peaks
in mid 1995.
Most important has been the weakening
in the
yen, which fell
against the US dollar from 133 at end March to a low of 146, before intervention by the US authorities saw it recover sharply (Graph 1).
In early June, however, the Australian dollar's fall accelerated, causing it to decline even
against the
yen, which was itself falling sharply.