Yen Rises as G-7 Says Slump to Persist, Japan’s Economy Shrinks

Enivid

Administrator
Staff member
Nov 30, 2008
18,812
1,419
144
Odesa
www.earnforex.com
The yen rose after finance ministers from the Group of Seven nations said the “severe” global slump will persist for most of 2009 and Japan’s economy shrank by the most since 1974, spurring investors to sell riskier assets.

The yen snapped two days of losses against the dollar and the euro as G-7 officials refrained from making any statement in support of efforts by Japan to weaken its currency. The pound fell versus all of the 16 most-active currencies after the Confederation of British Industry said the U.K. economy will contract at almost twice the pace previously forecast this year.

“The G-7 statement excluded reference to the yen and Japan’s GDP report was poor, which probably kept investors risk averse,” said Masashi Kurabe, head of currency sales and trading in Hong Kong at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s largest publicly traded bank by assets. “There’s a bias for the yen to strengthen.”

The yen climbed to 91.76 against the dollar as of 6:07 a.m. in London from 91.93 late in New York on Feb. 13. It advanced to 116.95 per euro from 118.37. Japan’s currency gained 1.3 percent to 59.57 versus Australia’s dollar and rose 1 percent to 47.58 against New Zealand’s dollar.

Japan’s currency may appreciate to 89 per dollar and 115 versus the euro this week, Kurabe said. Exchange-rate movements may be volatile in Asian trading as a national holiday in the U.S. reduces volumes, he said.

The U.S. dollar gained to $1.2742 per euro from $1.2862 in New York last week, and climbed to 1.1680 Swiss francs from 1.1590. The British pound fell 1.2 percent to $1.4189 and weakened 0.2 percent to 89.80 pence per euro.

From Bloomberg News.