Japanese government intervenes to stop further rise in the Yen

The Japanese government has finally stepped in to intervene and arrest any further rise in the Japanese Yen today, following days of caution and warning. The yen sank 2.8% to 79.18 per dollar at 1:36 p.m. in Tokyo, set for the largest intraday loss since March 18, when the Group of Seven nations jointly sold the currency.

The Japanese intervention followed a similar move by the Swiss government which cut interest rate to arrest the rise and appreciation of the Swiss franc.

Shares of exporters advanced in Tokyo and metals rebounded. Japan’s 10-year bond yield slipped below 1% and the Nikkei 225 Stock Average rallied 0.8%. 

The dollar-based MSCI Asia Pacific Index fell 1.2% and Standard & Poor’s 500 futures added 0.4%. More shares climbed than fell on MSCI’s Asia Pacific Index, which is extending its steepest two-day slump since March 15. Selling was skewed towards the larger names. Australia’s S&P/ASX 200 Index lost 0.5%, Hong Kong’s Hang Seng Index fell 0.1% and South Korea’s Kospi Index slipped 1.1%.

In corporate news, Mitsubishi Heavy Industries and Hitachi said they’re not holding talks to merge some of their businesses, hours after the president of Hitachi said that a deal was being discussed. The statements were released after Hitachi President Hiroaki Nakanishi’s televised comments on Tokyo Broadcasting System. 

In Australia, Newcrest Mining – the country’s biggest gold producer – said nine people were killed after a helicopter chartered by its joint venture with PT Aneka Tambang crashed yesterday in Indonesia.

In energy markets, crude oil for September delivery advanced 0.1% to US$92.05 a barrel on the New York Mercantile Exchange. Futures dropped 5.7% in the previous four days, reaching a five-week low. An Energy Department report showed U.S. crude inventories last week rose 950,000 barrels to 354.9 million. 

In commodity markets, fears of a U.S. recession sent prices lower. Zinc for three-month delivery rose 0.7% to US$2,393 a metric ton on the London Metal Exchange. Copper increased 0.3% and nickel climbed 0.6% after earlier losses. Immediate-delivery gold advanced 0.2% to US$1,665.50 an ounce, nearing the record high of US$1,672.80 yesterday.