JAPAN: Yen hits 2-year low against the dollar on new Japan government expectations
Record ID:
466823
JAPAN: Yen hits 2-year low against the dollar on new Japan government expectations
- Title: JAPAN: Yen hits 2-year low against the dollar on new Japan government expectations
- Date: 27th December 2012
- Summary: TOKYO, JAPAN (DECEMBER 27, 2012) (REUTERS) UNITED STATES OF AMERICA (USA) FLAG SCREEN SHOWING DOLLAR/YEN EXCHANGE RATE AT 85.74 TRADERS IN FRONT OF SCREEN WITH EURO/YEN RATE AT 113.35-40 JAPAN AND USA FLAGS VARIOUS OF TRADERS QUOTING CALL RATES TRADERS IN FRONT OF SCREEN WITH US DOLLAR/YEN RATE AT 85.75-80 FEMALE TRADER BEHIND US AND JAPAN FLAGS STEAM FROM HUMIDIFIER RISING IN FRONT OF SCREEN SHOWING FOREIGN EXCHANGE RATES EXTERIOR OF TOKYO STOCK EXCHANGE (TSE) TOKYO STOCK EXCHANGE LOGO ON FRONT DOOR WINDOW OF TSE TRADITIONAL JAPANESE NEW YEAR'S AT ENTRANCE OF TSE TSE MARKET OPEN GRAPHICS NIKKEI 225 INDEX SHOWING MARKET OPEN AT 10295.26 VARIOUS OF STOCK PRICES ON ELECTRONIC STOCK BOARD CAMERA OPERATOR IN FRONT OF ELECTRONIC STOCK BOARD FILMING ELECTRONIC STOCK TICKER ABOVE TSE MARKET CENTRE TSE EMPLOYEE BEHIND WINDOW IN MEDIA BOOTH TSE MARKET CENTRE VARIOUS OF TSE MARKET EMPLOYEES TSE MARKET CENTRE HALL ELECTRONIC STOCK TICKER ABOVE TSE MARKET CENTRE
- Embargoed: 11th January 2013 12:00
- Keywords:
- Location: Japan
- Country: Japan
- Topics: Economy,Politics
- Reuters ID: LVA8862PMNX7T8NNY6HWLLSV7IUW
- Story Text: The yen hit a two-year low against the dollar on Thursday (December 27), reflecting expectations that the new government of Prime Minister Shinzo Abe will push to weaken Japan's currency and implement aggressive stimulus.
Yoshihide Suga, chief cabinet secretary under a new government sworn in on Wednesday, told reporters that the administration will strengthen cooperation with the Bank of Japan to battle deflation and a strong yen.
"Since he (Abe) became the leader of the Liberal Democratic Party (LDP) his top priority has been to deal with the high yen and deflation. As such, as he has now become Prime Minister he will now look to work even closer with the Bank of Japan in order to overcome and deal with both of these problems," Suga said.
Abe, who has threatened to revise a law guaranteeing the Bank of Japan's independence if it refuses to set a two percent inflation target, appointed a cabinet of close allies on Wednesday (December 26).
The dollar is well on track to close above its 200-week moving average, now at roughly 84.95 yen, for the first time since the week ending Dec. 23, 2007.
A weaker yen helps lift exporters' overseas earnings when repatriated, thereby improving their competitiveness, particularly against South Korean and Chinese rivals.
The yen also fell against the euro, touching its lowest level in nearly 17 months. The euro rose to as high as 113.605 yen, the single currency's strongest level against the yen since early August of 2011.
The Nikkei share average climbed to a 21-month high on Thursday, opening at 10295.26 led by exporters, as the new Japanese prime minister's vow to battle deflation and a strong currency weighed on the yen.
Finance Minister Taro Aso said Prime Minister Shinzo Abe has ordered him to compile a stimulus package without sticking to the previous government's cap on new bond issuance, signalling a more aggressive policy to kick-start the ailing economy.
New Economics Minister Akira Amari also said on Thursday (December 27) the yen was heading toward appropriate levels with its recent weakening, and that it was important to maintain the downward trend.
Japan's currency is poised for a drop of more than 11 percent versus the dollar in 2012, its biggest fall since 2005, with most of the move coming after Abe was elected leader of his Liberal Democratic Party in September. - Copyright Holder: REUTERS
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