Yen Firms as Japan Dismisses Foreign Bond Purchase Plans
By Prasanth Aby Thomas | February 19, 2013 2:18 PM EST
The yen snapped its downward spiral against the dollar early in the day as Japanese lawmakers appeared to dismiss foreign bond purchases by the country's national bank.
The dollar eased 0.4 percent to 93.60 yen, moving further away from the 33-month peak of 94.47 yen touched in the previous week. The euro eased about 0.3 percent to 125.00 yen, after touching a 34-month high of 127.71 yen earlier this month.
Earlier this week the yen had turned bearish again after a break as the G20 group of ministers refrained from making direct comments at Japan's aggressive efforts to weaken the currency, despite the issue of 'currency wars' being a main discussion agenda.
Japanese Prime Minsiter Shinzo Abe had also indicated that foreign bond purchases could be a monetary easing option, boosting stimulus optimism.
But sentiments dampened and the yen turned bullish after Finance Minister Taro Aso said at a press conference that he was not looking at buying foreign bonds. Economy Minister Akira Amari stoked concerns further, suggesting that Abe's comments referred to the monetary policy options that nations generally consider.
"The fact that the dollar/yen couldn't break above last week's high yesterday points to the strength of the resistance," Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ told Reuters.
However, it is not just the political rhetoric that is affecting the yen's movement at the moment. Analysts point out that traders are maintaining a cautious stand ahead of the announcement of the next Bank of Japan governor.
The decision on the next central bank chief could prove crucial to Abe's heavy monetary stimulus promises that had helped him to achieve a landslide victory at the recent elections.
"We expect the selection of a nominee for BOJ governor to have a significant market impact, particularly on JPY rates," said Naka Matsuzawa, strategist at Nomura Research in Tokyo.
An announcement on the matter is expected as early as this week, but reports now suggest that the decision could be delayed until the coming week as a government spokesman suggested that it may happen by February end.
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
Most Popular Slideshows
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
- Prince Harry & Camilla Thurlow Getting Serious, St. Tropez Holiday Before The Prince’s 30th Birthday [PHOTOS]
- Angelina Jolie & Brad Pitt Heads to Malta For New Movie After A Whirlwind French Wedding [PHOTOS]
- Top 5 Richest Tennis Athletes
Join the Conversation
- Russia Invades Ukraine, Pro-Russian Rebels Create 'Second Front,' Obama Maintains No Military Action from US
- TEPCO Loses in Fukushima Suicide Case, Ordered to Pay $472,000 to Family
- Better Market Your Uranium Someplace Else, Japan Appetite No Longer Huge as Before – Former PM Tells Australia Queensland Premier Campbell Newman
- ISIS Wants $6.6M and Release of Aafia Siddiqui in Exchange of Head of Female US Humanitarian Aid Worker, 1st American Fighting for Jihadis Dead
- Product Recall Alert: Hewlett-Packard Pulls Out 6M Power Cords from US, Canada Over Fire Hazard Concerns, Australia Also Affected
- Sept 19 iPhone 6 Release Date Firms Up as iWatch Rollout Delayed to Jan 2015 – Reports
- Apple iWatch is iPhone 6 Accessory on Sept 19 Release Date: 6 Confirmed Specs & Features
- Canada Vs Russia War Erupts Via Twitter on Russia-Not Russia Maps
- James Foley Torture Involves CIA Waterboarding Technique
- Malaysia Airlines to Axe 4,000 Employees, Including CEO; Suspends Trading of Shares
- West Looks Divided in Tackling Russian Invasion In Ukraine
- North Korea Banker Who Manages Money of Kim Jong-un Defects to Russia With $5 Million