- Title: JAPAN: Dollar touches fresh 4-month low against the yen as U.S. debt woes deepen
- Date: 28th July 2011
- Summary: TOKYO, JAPAN (JULY 27, 2011) (REUTERS) VARIOUS OF DEALERS WORKING AT TOKYO FOREX UEDA HARLOW MONITOR SHOWING YEN-DOLLAR EXCHANGE RATE AT 77.87 MORE OF FOREX TRADERS WORKING MONITOR SHOWING YEN-DOLLAR EXCHANGE RATE AT 77.83 MORE OF THE TRADING ROOM TOKYO STOCK EXCHANGE (TSE) BUILDING "TOKYO STOCK EXCHANGE" SIGN TSE TRADING FLOOR ELECTRONIC STOCK BOARD ELECTRONIC STOCK BOARD SHOWING NIKKEI 225 INDEX AT 10020.18 DOWN 77.54 TSE STAFF WORKING VARIOUS OF TSE STAFF MONITORING TRADES MORE OF TSE TRADING FLOOR
- Embargoed: 12th August 2011 13:00
- Location: Japan, Japan
- Country: Japan
- Topics: Finance
- Reuters ID: LVA2DJGQV8MBG9KV15GZ8J2J2W6U
- Story Text: The dollar touched a fresh four-month low against the yen on Wednesday (July 27) as the U.S. currency came under broad pressure as U.S. politicians were making little progress on a plan to lift the U.S. debt ceiling.
Most market watchers expect some sort of last-minute deal in Washington. But the intense standoff has made investors increasingly hedge against an adverse outcome, particularly with seven days to go before an Aug. 2 deadline when the U.S. Treasury said it would not be able to borrow anymore.
The U.S. dollar on Tuesday also came under pressure as the Australian dollar surged on data showing that Australian consumer inflation rose faster than expected in the second quarter.
The U.S. dollar dipped to a four-month low just below 77.80 yen on trading platform EBS, bringing it closer to a record low of 76.25 yen hit in March. The dollar last stood at around 77.80 down 0.1 percent on the day.
Various sources with knowledge of Japan's currency issues told Reuters on Tuesday (July 26) that Japanese policymakers were becoming alarmed at persistent yen rises and considering solo currency intervention as an increasingly viable option for the near term.
Policymakers have said the fact that the yen rise is driven by external factors is no excuse to hold off on intervention, and worry that Japan's economy is still too weak to withstand the pain from yen gains.
Whether Tokyo will indeed step into the market and if so, when, will depend much on the pace of yen rises and whether the moves are accompanied by sharp falls in stock prices, officials say.
But some are wary of intervening now because of doubts about the effectiveness of acting when yen rises are driven by factors beyond Japan's control, and for fear of drawing criticism from Japan's G7 partners.
The Nikkei stock average fell on Wednesday as concerns mount about a deadlock in talks to raise the U.S. debt ceiling but market players say 10,000 is likely to hold on expectations of improved earnings in upcoming Japanese results.
The benchmark Nikkei fell 0.6 percent to 10,032.99, while the broader Topix index was down 0.7 percent at 859.86.
- Copyright Holder: REUTERS
- Usage Terms/Restrictions: None