Yen's rise worries Japan as euro takes breather
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Yen's rise worries Japan as euro takes breather
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TOKYO: The Japanese yen remained near a four-month high against the dollar in Tokyo trade Wednesday while the euro took a breather from sharp falls triggered by the eurozone debt crisis.
The yen eased to 79.42 to the dollar in Tokyo from 79.27 in New York Tuesday, but sharply higher than 80.28 Tuesday as investors fled to the safer currency amid a deepening debt crisis in Europe.
The euro remained volatile, fluctuating near the $1.40 mark. In Tokyo trade it bought $1.3995 and 111.09 yen in mid-morning, firming from $1.3974 and 110.69 yen in New York.
The Japanese unit remained near its highest level since reaching a record 76.25 against the greenback in the aftermath of the March 11 earthquake and tsunami, which prompted a joint Group of Seven currency market intervention.
Japanese Finance Minister Yoshihiko Noda called the yen's move "one-sided".
"I would like to continue to carefully monitor the market today," he said, without indicating any plan to intervene in the market to drive down the yen.
The yen is seen strengthening further against the dollar to around 76.90 in the coming week, said Citibank Japan's chief currency strategist Osamu Takashima.
Tokyo-based traders believe the Ministry of Finance could intervene in the market to prop up the dollar if the US unit falls below 77 yen.
The euro continued to be buffeted by eurozone debt worries, with the latest blow to the single currency coming from Tuesday's move by Moody's Investors Service to cut Ireland's credit rating to junk status.
Europe's woes have dominated investor attention globally amid fears debt contagion would spread to Italy and Spain, respectively the eurozone's third and fourth-biggest economies, and trigger a cascading crisis in world markets.
But in Tokyo trade, the single unit regained ground on short-covering, traders said, with many awaiting the outcome of stress tests on the eurozone banking sector.
"Investor sentiment faces a number of key trials ahead, including conclusions from ongoing euro area policy discussions and the announcement of results from European bank stress test this Friday," Barclays Capital said in a note to clients.
"Volatility is likely to remain elevated across different asset classes with the aforementioned uncertainties hanging heaviest over European markets," it added.
China said its economy grew 9.5 percent year-on-year in the second quarter, above the market's expectations of 9.4 percent but slower than 9.7-percent expansion seen in the first quarter.
The slightly stronger-than-expected GDP reading suggested that Beijing may not shift from its tightening stance. (AFP)
TOKYO: The Japanese yen remained near a four-month high against the dollar in Tokyo trade Wednesday while the euro took a breather from sharp falls triggered by the eurozone debt crisis.
The yen eased to 79.42 to the dollar in Tokyo from 79.27 in New York Tuesday, but sharply higher than 80.28 Tuesday as investors fled to the safer currency amid a deepening debt crisis in Europe.
The euro remained volatile, fluctuating near the $1.40 mark. In Tokyo trade it bought $1.3995 and 111.09 yen in mid-morning, firming from $1.3974 and 110.69 yen in New York.
The Japanese unit remained near its highest level since reaching a record 76.25 against the greenback in the aftermath of the March 11 earthquake and tsunami, which prompted a joint Group of Seven currency market intervention.
Japanese Finance Minister Yoshihiko Noda called the yen's move "one-sided".
"I would like to continue to carefully monitor the market today," he said, without indicating any plan to intervene in the market to drive down the yen.
The yen is seen strengthening further against the dollar to around 76.90 in the coming week, said Citibank Japan's chief currency strategist Osamu Takashima.
Tokyo-based traders believe the Ministry of Finance could intervene in the market to prop up the dollar if the US unit falls below 77 yen.
The euro continued to be buffeted by eurozone debt worries, with the latest blow to the single currency coming from Tuesday's move by Moody's Investors Service to cut Ireland's credit rating to junk status.
Europe's woes have dominated investor attention globally amid fears debt contagion would spread to Italy and Spain, respectively the eurozone's third and fourth-biggest economies, and trigger a cascading crisis in world markets.
But in Tokyo trade, the single unit regained ground on short-covering, traders said, with many awaiting the outcome of stress tests on the eurozone banking sector.
"Investor sentiment faces a number of key trials ahead, including conclusions from ongoing euro area policy discussions and the announcement of results from European bank stress test this Friday," Barclays Capital said in a note to clients.
"Volatility is likely to remain elevated across different asset classes with the aforementioned uncertainties hanging heaviest over European markets," it added.
China said its economy grew 9.5 percent year-on-year in the second quarter, above the market's expectations of 9.4 percent but slower than 9.7-percent expansion seen in the first quarter.
The slightly stronger-than-expected GDP reading suggested that Beijing may not shift from its tightening stance. (AFP)
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