Japanese government intervenes to stop further rise in the Yen
City Index August 4, 2011 8:31 PM
<p>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. […]</p>
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.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.