Yen recovers from multi-year lows

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TOKYO: The yen clawed back some losses in Asia after a steep slide over the past week left it at multi-year lows against the dollar and euro, but analysts said another fall could be in store.

In Tokyo, the greenback slipped to 117.85 yen, against 118.22 yen in New York, where it almost broke the 119 yen level for the first time since August 2007.

The euro bought 147.23 yen compared with 148.25 yen, a six-year high, while it weakened to $1.2492 against $1.2540.

Comments from Japanese finance minister Taro Aso appeared to briefly cap the yen’s losses after he told a regular news briefing that the pace of the decline in the past week has been “too fast.”


“He is only saying that the yen’s rapid fall is not a welcome thing. But it does not mean that he wants to cap the move at this level,” said Yuji Saito, foreign exchange director at Credit Agricole in Tokyo.

“The [downward]trend will remain the same.”

Prime Minister Shinzo Abe dissolved the lower house of parliament for an election next month. The poll comes after data showed Japan’s economy sank into recession in the July-September quarter following a sales tax hike that hit consumer spending.

The news also led him to delay another sales tax hike planned for next year.

Tokyo’s Nikkei stock index hit a seven-year high last week after the Bank of Japan expanded its monetary easing program on October 31, sending the yen into a freefall.

The dollar also won support from upbeat US data.

A regional manufacturing index from the Federal Reserve Bank of Philadelphia surged unexpectedly, while the Conference Board’s Leading Economic Index, an amalgamation of several key economic indicators, also improved.

Also, US existing-home sales gained in October for the second straight month, while the Labor Department said US consumer prices were unchanged in October from September, keeping the annual inflation rate at a modest 1.7 percent.

The figures are the latest showing the country is on a strong recovery track, despite weakness in the Chinese, Japanese and eurozone economies.

AFP

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