(RTTNews) - The Japanese currency saw weakness against the dollar and pound on Thursday in New York, hitting short-term lows against each counterpart. The yen was slightly higher against the euro and franc.
The Ministry of Economy, Trade and Industry reported that overall retail sales in Japan inched up 0.1% year-on-year in April. That marked the ninth straight month of increase, but it came in well below analyst expectations that called for a 0.6% annual increase. It was also lower than the revised 1% year-on-year expansion in the previous month. On a seasonally adjusted basis, sales eased 0.1% annually, below expectations for a flat reading and down from the revised 0.4% year-on-year increase in March.
Elsewhere, the Ministry of Finance stated that Japanese investors purchased a net 476.5 billion yen in foreign bonds in the week ended May 23, up from 290.2 billion yen in the previous week.
The yen slipped to a three-month low against the greenback. The Japanese currency touched as low as 105.86 before edging back to 105.53 in the mid-afternoon.
The Japanese currency was modestly higher in choppy trading against the euro, which dropped against other majors as well. The pair moved at 163.58 in the mid-afternoon.
The yen moved to its lowest level in nearly four weeks against the British pound. The pair moved at 208.33 in the mid-afternoon after the Japanese currency earlier touched as low as 208.95. Against the Swiss franc, the yen was higher at 100.50.
See more news
Thursday, May 29, 2008
GDP, Fed's Tough Talk on Inflation Boost Dollar
This week has so far been a good one for the US dollar - the US currency rallied higher against other currencies like the Euro, Swiss franc, British pound and Japanese yen after the positive US GDP data that met expectations, following Wednesday’s better-than-expected durable goods orders.
The government said today that US gross domestic product, a measure of goods and services produced, rose at a seasonally adjusted 0.9% annual rate in the first quarter, which was slightly higher than the first estimate of 0.6% growth in the first quarter. It’s a little irrelevant to still debate whether the US was “really” in a recession from January to March even though the GDP number shows borderline growth as we are already more than half into the second quarter. The biggest drag on the US economy is the fall in consumer spending, which makes up about 70% of GDP. A huge chunk of the overall GDP - about 1.17 percentage points - was cut by the 25.2% drop in residential fixed investment.
Higher Rates In US Soon?
The US dollar also got a boost from Dallas Fed’s Richard Fisher who hinted that the Fed might raise interest rates “sooner rather than later”. He said that if inflation and inflation expectations keep getting worse, that he would “expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic economic scenario”.
Fisher, a voting member of the FOMC, is the only member to dissent three times from decisions to cut the Fed funds rate, preferring no change. Yesterday Minneapolis Fed’s Gary Stern said that inflation is too high and the Fed will need to consider the timing and magnitude of any reversal in interest rate cuts.
UK Home Prices Fall Again
Nationwide reported that UK house prices fell 2.5% month-on-month in May, worse than the 0.5% decline expected, and that is the largest monthly decline ever, since record-keeping began in January 1991. May’s drop in home prices was the 7th straight month of declines, which was the longest consecutive period of monthly falls since 1992.
Forex Trading
EUR/USD broke out below 1.5600 to reach an intraday low around 1.5520. Downside targets are possibly 1.5480-90, then 1.5430. USD/CHF rallied for the third day in a row and hit a high around 1.0480 and next topside targets are around 1.0530, 1.0570-90. GBP/USD fell further today to to 1.9670 on weak housing data from the UK.
Friday:
German retail sales 0600 GMT
Italy CPI, Eurozone CPI, Eurozone unemployment rate 0900 GMT
Canada GDP 1230 GMT
US PCE core, personal spending 1230 GMT
More Here
The government said today that US gross domestic product, a measure of goods and services produced, rose at a seasonally adjusted 0.9% annual rate in the first quarter, which was slightly higher than the first estimate of 0.6% growth in the first quarter. It’s a little irrelevant to still debate whether the US was “really” in a recession from January to March even though the GDP number shows borderline growth as we are already more than half into the second quarter. The biggest drag on the US economy is the fall in consumer spending, which makes up about 70% of GDP. A huge chunk of the overall GDP - about 1.17 percentage points - was cut by the 25.2% drop in residential fixed investment.
Higher Rates In US Soon?
The US dollar also got a boost from Dallas Fed’s Richard Fisher who hinted that the Fed might raise interest rates “sooner rather than later”. He said that if inflation and inflation expectations keep getting worse, that he would “expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic economic scenario”.
Fisher, a voting member of the FOMC, is the only member to dissent three times from decisions to cut the Fed funds rate, preferring no change. Yesterday Minneapolis Fed’s Gary Stern said that inflation is too high and the Fed will need to consider the timing and magnitude of any reversal in interest rate cuts.
UK Home Prices Fall Again
Nationwide reported that UK house prices fell 2.5% month-on-month in May, worse than the 0.5% decline expected, and that is the largest monthly decline ever, since record-keeping began in January 1991. May’s drop in home prices was the 7th straight month of declines, which was the longest consecutive period of monthly falls since 1992.
Forex Trading
EUR/USD broke out below 1.5600 to reach an intraday low around 1.5520. Downside targets are possibly 1.5480-90, then 1.5430. USD/CHF rallied for the third day in a row and hit a high around 1.0480 and next topside targets are around 1.0530, 1.0570-90. GBP/USD fell further today to to 1.9670 on weak housing data from the UK.
Friday:
German retail sales 0600 GMT
Italy CPI, Eurozone CPI, Eurozone unemployment rate 0900 GMT
Canada GDP 1230 GMT
US PCE core, personal spending 1230 GMT
More Here
Sunday, May 4, 2008
13 Asian nations agree to set up $80-B crisis fund
13 Asian nations agree to set up $80-B crisis fund
Agence France Presse
MADRID - Finance ministers of 13 Asian nations agreed here on Sunday to set up a foreign exchange pool of at least 80 billion dollars (52 billion euros) to be used in the event of another regional financial crisis.
China, Japan and South Korea will provide 80 percent of the funds, with the rest coming from the 10 members of ASEAN, they said in a joint statement issued after talks on the sidelines of an Asian Development Bank meeting in Madrid.
The 13 nations agreed after the 1997-98 Asian financial crisis to set up a mainly bilateral currency swap scheme known as the Chiang Mai Initiative (CMI) to protect their currencies from turmoil in the future.
At the ADB's last annual meeting in Japan in May 2007, they decided to set aside part of their foreign reserves for a multi-nation system of reserves for use in emergencies, but did not decide on the size of the pool.
"We are committed to further accelerate our work in order to reach consensus on all of the elements which include concrete conditions eligible for borrowing and contents of convenants specified in borrowing arrangements," the statement said.
The foreign exchange pool would be self-managed and be governed by a single contract that will be legally binding, it added.
Vietnam's Finance Minister Vu Van Ninh, who co-chaired the Madrid meeting, said the 13 nations would now work to develop a way of monitoring the fund.
"We think it is very important to have a rigorous surveillance system, especially in the context that regional economies have made an important and big integration into the world economy," he told reporters.
Japanese Finance Minister Fukushiro Nukaga, the other meeting co-chair, did not give a timeline for the the creation of the fund when asked, saying only that it "should be achievable in terms of its objectives."
The creation of the pool is a big step towards the creation af an Asian equivalent of the Washington-based International Monetary Fund (IMF).
During the 1997-1998 Asian financial crisis Indonesia, Thailand and South Korea had to borrow heavily from the IMF to boost their finances as investors sold their currencies.
The IMF forced the governments of the three nations to make unpopular spending cuts, sell state-owned firms and raise interest rates in exchange for the loans of over 100 billion dollars.
Asian economies are being challenged by rising energy and commodity prices as well as the vulnerability of financial markets, the finance ministers said in the statement.
"The regional economy has continued its strong growth and is forecast to remain robust although somewhat weaker," it said.
"We confirmed the importance of taking appropriate actions to ensure that economic activity continues at a sustained pace by balancing policies to deal with these risks," it added.
The ADB predicts Asia's developing economies will expand by 7.6 percent in 2008, its lowest level in five years, after surging ahead 8.7 percent last year.
Inflation in the region should hit 5.1 percent this year, its highest level since the 1997-1998 financial crisis.
The 13 countries are China, Japan, South Korea and the Association of Southeast Asian Nations (ASEAN), made up of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
From: http://www.abs-cbnnews.com/storypage.aspx?StoryId=117144
Agence France Presse
MADRID - Finance ministers of 13 Asian nations agreed here on Sunday to set up a foreign exchange pool of at least 80 billion dollars (52 billion euros) to be used in the event of another regional financial crisis.
China, Japan and South Korea will provide 80 percent of the funds, with the rest coming from the 10 members of ASEAN, they said in a joint statement issued after talks on the sidelines of an Asian Development Bank meeting in Madrid.
The 13 nations agreed after the 1997-98 Asian financial crisis to set up a mainly bilateral currency swap scheme known as the Chiang Mai Initiative (CMI) to protect their currencies from turmoil in the future.
At the ADB's last annual meeting in Japan in May 2007, they decided to set aside part of their foreign reserves for a multi-nation system of reserves for use in emergencies, but did not decide on the size of the pool.
"We are committed to further accelerate our work in order to reach consensus on all of the elements which include concrete conditions eligible for borrowing and contents of convenants specified in borrowing arrangements," the statement said.
The foreign exchange pool would be self-managed and be governed by a single contract that will be legally binding, it added.
Vietnam's Finance Minister Vu Van Ninh, who co-chaired the Madrid meeting, said the 13 nations would now work to develop a way of monitoring the fund.
"We think it is very important to have a rigorous surveillance system, especially in the context that regional economies have made an important and big integration into the world economy," he told reporters.
Japanese Finance Minister Fukushiro Nukaga, the other meeting co-chair, did not give a timeline for the the creation of the fund when asked, saying only that it "should be achievable in terms of its objectives."
The creation of the pool is a big step towards the creation af an Asian equivalent of the Washington-based International Monetary Fund (IMF).
During the 1997-1998 Asian financial crisis Indonesia, Thailand and South Korea had to borrow heavily from the IMF to boost their finances as investors sold their currencies.
The IMF forced the governments of the three nations to make unpopular spending cuts, sell state-owned firms and raise interest rates in exchange for the loans of over 100 billion dollars.
Asian economies are being challenged by rising energy and commodity prices as well as the vulnerability of financial markets, the finance ministers said in the statement.
"The regional economy has continued its strong growth and is forecast to remain robust although somewhat weaker," it said.
"We confirmed the importance of taking appropriate actions to ensure that economic activity continues at a sustained pace by balancing policies to deal with these risks," it added.
The ADB predicts Asia's developing economies will expand by 7.6 percent in 2008, its lowest level in five years, after surging ahead 8.7 percent last year.
Inflation in the region should hit 5.1 percent this year, its highest level since the 1997-1998 financial crisis.
The 13 countries are China, Japan, South Korea and the Association of Southeast Asian Nations (ASEAN), made up of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
From: http://www.abs-cbnnews.com/storypage.aspx?StoryId=117144
Trade #058
Trade #058
other SELL...
Now GBP/JPY (H4)
Entry = 204.75
Exit - 204.30
Total = 3655 pips (58 trades)
other SELL...
Now GBP/JPY (H4)
Entry = 204.75
Exit - 204.30
Total = 3655 pips (58 trades)
Asian nations agree to currency swap
Asian nations agree to currency swap
East Asian finance ministers have agreed to upgrade to an $US80 billion ($A85.87 billion)currency swap scheme to fight regional financial crises, a deal taking them a step closer to creating a full scale Asian monetary fund.
"Member economies welcomed the initiative to promote multilateralism," Japan's Finance Minister Fukushiro Nukaga told reporters after a three-hour meeting to hammer out the broad terms of the deal with his counterparts from 12 Asian economies comprising the so-called ASEAN+3 group.
The deal - more than a year in the making - will replace the existing arrangement of mainly bilateral currency swaps, called the Chiang Mai Initiative (CMI) and transform it into a more powerful self-managed reserve pooling mechanism governed by a legally binding single contract.
Vietnam's Finance Minister Vu Van Ninh, who co-chaired the ASEAN+3 meeting with Nukaga, said the agreement had been secured at a crucial time.
"There are outstanding risks to the global economy including the financial market turmoil and inflationary pressures from food and energy. To overcome these risks, mutual support in this region is extremely important," he told reporters.
The deal essentially gives to any of the signatory economies access to a foreign exchange reserves pool of at least $US80 billion ($A85.87 billion) in the event of a financial emergency.
The talks, which took place on the sidelines of the Asian Development Bank's annual meeting in Madrid, saw Japan, China and South Korea agree to provide 80 per cent of the total, ASEAN countries the balance.
Officials said loans will be made in US dollars against local currency collateral provided by the borrowing nation, either via a currency swap or a promissory note.
Loans will cost between 150 and 300 basis points above the London Interbank Offered Rate (Libor) and be provided for three months, renewable for up to two years. Borrowing costs will be reviewed every five years.
Finance officials say the agreement will be a significant step forward for the 13 nations involved in the bilateral swap deals that were created in the wake of the 1997-98 Asian financial crisis, taking them closer to a full scale regional equivalent to the International Monetary Fund.
"This will play a role of supplementing existing international financial stability schemes," South Korea's Deputy Finance Minister Shin Je-yoon told reporters earlier in the day after a meeting of finance chiefs from Japan, China and South Korea.
"This will show to the world that Asia is making a concerted push about securing financial stability."
The finance ministers said they were determined to work together to secure financial stability in Asia and would create a forum in which to discuss policies required to do so.
Calls for an Asian monetary fund were made during the depths of the Asian financial crisis when IMF-led bailouts worth around $US100 billion ($A107.34 billion) came attached with conditions for unpopular austerity programs and economic reforms.
But Naoyuki Shinohara, Japan's vice finance minister for international affairs, said ahead of the ADB meeting that any deal agreed would not be about creating easy money.
"We don't want it to be a mechanism to give out easy money," Shinohara said. "The most important issue is how to strengthen surveillance," he added.
Complicated factors remain to be negotiated, such as how to activate currency swaps while making sure borrowing countries would return the money after a crisis ends.
Japan's Nukaga said it would take a further year for the scheme's final framework to be agreed before the multilateral pool could be activated and accessed by its
From: http://money.ninemsn.com.au/article.aspx?id=457306
East Asian finance ministers have agreed to upgrade to an $US80 billion ($A85.87 billion)currency swap scheme to fight regional financial crises, a deal taking them a step closer to creating a full scale Asian monetary fund.
"Member economies welcomed the initiative to promote multilateralism," Japan's Finance Minister Fukushiro Nukaga told reporters after a three-hour meeting to hammer out the broad terms of the deal with his counterparts from 12 Asian economies comprising the so-called ASEAN+3 group.
The deal - more than a year in the making - will replace the existing arrangement of mainly bilateral currency swaps, called the Chiang Mai Initiative (CMI) and transform it into a more powerful self-managed reserve pooling mechanism governed by a legally binding single contract.
Vietnam's Finance Minister Vu Van Ninh, who co-chaired the ASEAN+3 meeting with Nukaga, said the agreement had been secured at a crucial time.
"There are outstanding risks to the global economy including the financial market turmoil and inflationary pressures from food and energy. To overcome these risks, mutual support in this region is extremely important," he told reporters.
The deal essentially gives to any of the signatory economies access to a foreign exchange reserves pool of at least $US80 billion ($A85.87 billion) in the event of a financial emergency.
The talks, which took place on the sidelines of the Asian Development Bank's annual meeting in Madrid, saw Japan, China and South Korea agree to provide 80 per cent of the total, ASEAN countries the balance.
Officials said loans will be made in US dollars against local currency collateral provided by the borrowing nation, either via a currency swap or a promissory note.
Loans will cost between 150 and 300 basis points above the London Interbank Offered Rate (Libor) and be provided for three months, renewable for up to two years. Borrowing costs will be reviewed every five years.
Finance officials say the agreement will be a significant step forward for the 13 nations involved in the bilateral swap deals that were created in the wake of the 1997-98 Asian financial crisis, taking them closer to a full scale regional equivalent to the International Monetary Fund.
"This will play a role of supplementing existing international financial stability schemes," South Korea's Deputy Finance Minister Shin Je-yoon told reporters earlier in the day after a meeting of finance chiefs from Japan, China and South Korea.
"This will show to the world that Asia is making a concerted push about securing financial stability."
The finance ministers said they were determined to work together to secure financial stability in Asia and would create a forum in which to discuss policies required to do so.
Calls for an Asian monetary fund were made during the depths of the Asian financial crisis when IMF-led bailouts worth around $US100 billion ($A107.34 billion) came attached with conditions for unpopular austerity programs and economic reforms.
But Naoyuki Shinohara, Japan's vice finance minister for international affairs, said ahead of the ADB meeting that any deal agreed would not be about creating easy money.
"We don't want it to be a mechanism to give out easy money," Shinohara said. "The most important issue is how to strengthen surveillance," he added.
Complicated factors remain to be negotiated, such as how to activate currency swaps while making sure borrowing countries would return the money after a crisis ends.
Japan's Nukaga said it would take a further year for the scheme's final framework to be agreed before the multilateral pool could be activated and accessed by its
From: http://money.ninemsn.com.au/article.aspx?id=457306
FOREX-Dollar underpinned by Fed view, yen pressured
SYDNEY, May 5 (Reuters) - The U.S. dollar was a shade softer on Monday but held on to of most of last week's gains, supported by speculation the Federal Reserve will not need to cut interest rates again.
The euro had drifted to $1.5432 in early Asian trade, not far from Friday's late $1.5424 and well off April's record highs around $1.6018.
The yen remained weak as returning risk appetite encouraged borrowing yen at low rates to invest in high yielding currencies like the Australian and New Zealand dollars. One dollar bought 105.34 yen, far above the March trough of 95.71.
Activity was light with markets in Tokyo and London off for holidays and traders now waiting to see if a survey on the U.S. services sector later in the session proves as resilient as other recent figures.
The dollar firmed on Friday after U.S. payrolls fell by a surprisingly small 20,000 in April, while the jobless rate actually dipped to 5.0 percent.
"The drop in the unemployment rate has strengthened the market's conviction that the Fed is done," said Darren Gibbs, an economist at Deutsche Bank.
"For the first time this year near-ahead Fed funds expectations are flat with the actual Fed funds rate," he added. "What's more, the market is pricing a decent chance of a rate hike by the end of the year."
However, he suspected the April payrolls reported overstated the true health of the labour market and expected a big negative swing in May. If correct, that meant the market was premature in pricing out the chance of further easing. Still, the next payrolls report was a month away and this week was relatively light for major U.S. economic data, leaving the dollar's recent uptrend intact for now.
The New York Board of Trade's dollar index, which charts the dollar's performance against a basket of six currencies, was steady at 73.456 on Monday, having hit two-month peaks at 73.698 .DXY last week.
From: http://www.reuters.com/article/marketsNews/idUSSYD1979520080504?rpc=401&
The euro had drifted to $1.5432
The yen remained weak as returning risk appetite encouraged borrowing yen at low rates to invest in high yielding currencies like the Australian
Activity was light with markets in Tokyo and London off for holidays and traders now waiting to see if a survey on the U.S. services sector later in the session proves as resilient as other recent figures.
The dollar firmed on Friday after U.S. payrolls fell by a surprisingly small 20,000 in April, while the jobless rate actually dipped to 5.0 percent.
"The drop in the unemployment rate has strengthened the market's conviction that the Fed is done," said Darren Gibbs, an economist at Deutsche Bank.
"For the first time this year near-ahead Fed funds expectations are flat with the actual Fed funds rate," he added. "What's more, the market is pricing a decent chance of a rate hike by the end of the year."
However, he suspected the April payrolls reported overstated the true health of the labour market and expected a big negative swing in May. If correct, that meant the market was premature in pricing out the chance of further easing. Still, the next payrolls report was a month away and this week was relatively light for major U.S. economic data, leaving the dollar's recent uptrend intact for now.
The New York Board of Trade's dollar index, which charts the dollar's performance against a basket of six currencies, was steady at 73.456 on Monday, having hit two-month peaks at 73.698 .DXY last week.
From: http://www.reuters.com/article/marketsNews/idUSSYD1979520080504?rpc=401&
Trade #056
Trade #056
SELL - EUR/JPY (H4)
Entry = 157.80
Result = + 80 pips
Total = 3410 pips (56 trdes)
Thanks Skyson !!!
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