Bloomberg News

Yen, Dollar Fall Versus Peers as Stocks Reverse Losses

May 10, 2012

The yen and dollar fell against most of their major peers as Asian stocks reversed earlier losses, reducing demand for the currencies as havens.

The yen erased gains after Bank of Japan (8301) board member Sayuri Shirai said the central bank must keep monitoring currency movements. Australia’s dollar rallied after the country’s jobless rate unexpectedly fell. The 17-nation euro was 0.3 percent from its weakest since Jan. 23 against the dollar as Greece’s leaders remained divided on forming a new government, stoking concern another election could set the stage for the country’s exit from the currency union.

“The market may not be as risk-averse as people have been saying,” said Makoto Noji, a Tokyo-based senior debt and currency strategist at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “There would be pressure for the Bank of Japan to ease policy further if the yen strengthens. Buyers of yen against the dollar may be limited.”

The yen weakened 0.3 percent to 103.30 per euro at 7:53 a.m. London time, after gaining 0.9 percent yesterday. Japan’s currency was little changed at 79.72 per dollar. The euro rose 0.3 percent to $1.2957. It touched $1.2912 yesterday, the lowest since Jan. 23.

The Australian dollar advanced 0.7 percent to $1.0121. The so-called Aussie rallied 0.8 percent to 80.69 yen.

The MSCI Asia Pacific Index (MXAP) was little changed after earlier falling as much as 0.3 percent.

Monitoring Yen Moves

The BOJ must keep paying attention to currency movements, board member Shirai said to reporters in Akita, northern Japan today.

The yen slid against the euro as the currency’s 14-day relative strength index against the euro rose to 72 yesterday, above the 70 level some traders see as signaling an asset may reverse direction.

Australia’s unemployment rate fell to 4.9 percent in April from 5.2 percent a month earlier, the statistics bureau said in Sydney today. That matches the lowest level since December 2008 and contrasts with a rise to 5.3 percent predicted by economists in a Bloomberg News survey. Payrolls increased by 15,500, compared with the median estimate for a reduction of 5,000 in another poll.

“It was quite a shock drop in terms of unemployment,” said Callum Henderson, global head of currency research at Standard Chartered Plc in Singapore, said about Australia’s jobs data. “The Aussie may gain for the next few days.”

China Trade Data

The Australian currency pared gains after China reported slower growth in exports and imports. The Asian nation is Australia’s biggest trading partner.

Overseas shipments rose 4.9 percent from a year earlier, the customs bureau said on its website today. That compares with the 8.5 percent median estimate in a Bloomberg survey of 33 analysts. Import growth of 0.3 percent trailed forecasts for a 10.9 percent gain. The trade surplus was $18.4 billion, almost double estimates of $9.9 billion.

The euro fell to the lowest in more than three months yesterday as Greek leaders struggled to reach an agreement on implementing austerity measures. Evangelos Venizelos, leader of Greece’s Pasok party and the former finance minister, said he’ll try to form a government when he receives a three-day mandate from President Karolos Papoulias today. Pasok yesterday rejected terms for a government set by Alexis Tsipras of Greece’s anti- bailout Syriza party which then gave up its bid to build a coalition.

Euro-area leaders from the European Central Bank’s Joerg Asmussen to German Finance Minister Wolfgang Schaeuble have begun to raise doubts that Greece can stay in the monetary union.

Stay or Go

“If Greece decides not to stay in the euro zone, we cannot force Greece,” German Finance Minister Wolfgang Schaeuble said at a conference sponsored by German broadcaster WDR in Brussels yesterday. “They will decide whether to stay in the euro zone or not.”

Asmussen, a member of the ECB’s executive board, told Handelsblatt on May 8 that for Greece “there is no alternative to the agreed consolidation program if it wants to remain a member of the euro zone.”

In France, industrial production probably fell 0.6 percent in March from the previous month, when it gained 0.3 percent, according to economists surveyed by Bloomberg. The national statistics office Insee in Paris will announce data today.

“The market has started anticipating Greece’s exit from the euro,” said Junichi Ishikawa, an analyst in Tokyo at IG Markets Securities Ltd. “Selling pressure for the euro remains intact.”

To contact the reporters on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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