By - Carla Mozee
Category - Santa Clarita Local Colleges
Posted By - Hampton Inn Santa Clarita
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| Santa Clarita Local Colleges |
The U.S. dollar rose against Japan’s currency Monday, flirting with the 100-yen level after financial officials from the world’s top economies refrained from criticizing Japan’s weakening of the yen through its monetary-policy program.
The dollar rose to ¥99.82, up from ¥99.52 late Friday in North American trade.
Monday’s decline in the yen drove Japan’s Nikkei Stock Average higher, as a weaker yen provides a competitive boost to Japanese exporters.
The dollar on Friday climbed more than 1% against the yen after the Group of 20 major economies said Japan’s recent monetary-policy actions are aimed at ending long-running deflation and supporting domestic demand, rather than accusing it of competitive devaluation.
The “G-20 and the [Bank of Japan] have made it very clear to the financial community that Japan has the green light regarding continued [quantitative easing] and resulting [yen] weakness,” wrote Chapdelaine Foreign Exchange managing director Douglas Borthwick to clients Friday.
“The ¥100 level in [dollar/yen] will fall soon, with ¥110.00 possible in coming weeks,” Borthwick said.
The dollar had jumped close to the ¥100 level in the days after the Bank of Japan’s April 3 announcement of a two-year campaign to defeat deflation in the country’s stagnant economy. The dollar had traded at ¥92.89 just before the announcement.
However, the greenback ran into resistance at the psychologically important ¥100 level, which it hasn’t crossed since April 2009, according to FactSet data.
Bank of Japan Gov. Haruhiko Kuroda reportedly told Japan’s upper house budget committee Monday that, last week in Washington, he explained to the G-20 that the Japanese central bank’s monetary-easing plan was aimed squarely at achieving its target of 2% consumer-price inflation.
“No one is prepared to get in Japan’s way when it comes to Abenomics and their goal of creating inflation,” said Borthwick, referring to Japan’s monetary and fiscal initiatives pushed by Japan’s Prime Minister Shinzo Abe.
“The global hope is that inflation will drive growth in Japan, finally awaking this sleeping giant. [Yen] weakness is now a given — the only uncertainty is the pace at which this unfolds,” Borthwick said.
The euro changed hands at ¥130.52, stronger than ¥130.09 on Friday.
This week, investors will look for any further comments from the Bank of Japan in its next policy announcement, due Friday.
Euro slips, sterling steady
Against the dollar, the euro fetched $1.3076 on Monday, down from $1.3108 late Friday in North America.
The euro had pushed above $1.31 Friday after Bundesbank President Jens Weidmann said the European Central Bank would only cut rates if economic data further deteriorated. Weidmann is a member of the ECB Governing Council.
In other major pairs, the British pound traded at $1.5227, unchanged from Friday when the currency fell after Fitch Ratings cut the United Kingdom’s long-term issuer default rating to AA+ from AAA.
The Australian dollar was at $1.0298, down from $1.0343 late Friday.
The ICE dollar index , a measure of the dollar against a basket of six other major currencies, slipped to 82.694 from 82.731 on Friday.
But the WSJ Dollar Index , a rival gauge that uses a slightly larger basket, rose to 73.99 from 73.94.
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