Bloomberg.com: Japan
Bloomberg.com: Japan
Yen Gains; China's Zhou Says Yuan Shift May Be Accelerated
April 25 (Bloomberg) -- The yen rose to a one-month high after Chinese central bank governor Zhou Xiaochuan said his country may speed up preparations to loosen the yuan's peg to the dollar in response to pressure from the U.S., Europe and Japan.
A stronger yuan may reduce the competitiveness of China's exports compared with Japan. Nations like Japan and South Korea that have sold their currencies in recent years to curb gains may be more relaxed about letting them strengthen, said Monica Fan, head of global currency research at RBC Capital Markets.
Zhou's ``comments certainly strike me as very different from what they have said in the past, which is that they won't bow to outside pressure,'' said Fan, who is based in London. ``The yen will strengthen along with other Asian currencies.''
The yen climbed as high as 105.27 per dollar, the strongest since March 22, and was trading at 105.66 at 7:54 a.m. in Tokyo from 106.00 late on April 22 in New York, according to electronic foreign exchange trading system EBS. Japan's currency also rose to 137.87 versus the euro from 138.50. The dollar was at $1.3048 per euro from $1.3064.
Japanese companies sell more products to China, Asia's second- largest economy, than any other market. The yen is up 3.1 percent from a five-month low on April 5 after Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow said China should cease trying to prevent the yuan from appreciating.
Zhou, who heads the People's Bank of China, said on April 23 their opinions may be taken into account. ``If there is more pressure from outside, it will force us to speed up our reform,'' he said at the Boao Forum on the Chinese island of Hainan. He gave no timetable.
Bullish on Yen
Sixty percent of the 70 strategists, investors and traders polled by Bloomberg on April 22 from Sydney to New York advised buying yen against the dollar, double the previous week. Fifty- nine percent said to buy Japan's currency versus the euro.
``The market has jumped onto China as an issue,'' said Kamal Sharma, a currency strategist in London at Dresdner Kleinwort Wasserstein. ``It started off with the Snow comments after the G-7 meeting and then we had Greenspan comments, which are having an impact. The dollar has definitely gone lower on this.''
Zhou, President Hu Jintao and Premier Wen Jiabao are among Chinese officials who have said over the past two years they are prepared to let the yuan trade more freely. Still, ``we don't see that the pressure is that strong right now,'' Zhou said.
China ``will positively, but prudently, accelerate the process of reform of the renminbi exchange rate,'' Wei Benhua, deputy director of the State Administration of Foreign Exchange, said yesterday.
`Ticking Over'
Complaints from the Bush administration and Congress will spur more buying of the yen this week, said Tony Norfield, global head of currency strategy at ABN Amro Holding NV in London.
``We are not looking for a move by China until the fourth quarter, but the noises coming from the U.S. will keep the issue ticking over and lift Asian currencies, including the yen,'' he said. Norfield recommended on April 21 that clients wager on the yen's advance versus the euro.
Japanese investors are more bearish on the dollar versus the yen, according to a survey of clients by the Bank of Tokyo Mitsubishi Ltd.
The proportion of customers who said they were dollar ``bears'' increased to 29.6 percent from 19 percent the week before. The number of ``bulls'' fell to 18.5 percent from 33.3 percent, the survey showed.
Bank of Tokyo-Mitsubishi, a unit of Japan's second-largest Lender by assets, each Friday surveys about 40 Japanese companies, including exporters, importers and foreign banks in Japan, on their outlook for the dollar against the yen.
To contact the reporter on this story:
John Brinsley at At jbrinsley@bloomberg.net
Last Updated: April 24, 2005 18:58 EDT
Yen Gains; China's Zhou Says Yuan Shift May Be Accelerated
April 25 (Bloomberg) -- The yen rose to a one-month high after Chinese central bank governor Zhou Xiaochuan said his country may speed up preparations to loosen the yuan's peg to the dollar in response to pressure from the U.S., Europe and Japan.
A stronger yuan may reduce the competitiveness of China's exports compared with Japan. Nations like Japan and South Korea that have sold their currencies in recent years to curb gains may be more relaxed about letting them strengthen, said Monica Fan, head of global currency research at RBC Capital Markets.
Zhou's ``comments certainly strike me as very different from what they have said in the past, which is that they won't bow to outside pressure,'' said Fan, who is based in London. ``The yen will strengthen along with other Asian currencies.''
The yen climbed as high as 105.27 per dollar, the strongest since March 22, and was trading at 105.66 at 7:54 a.m. in Tokyo from 106.00 late on April 22 in New York, according to electronic foreign exchange trading system EBS. Japan's currency also rose to 137.87 versus the euro from 138.50. The dollar was at $1.3048 per euro from $1.3064.
Japanese companies sell more products to China, Asia's second- largest economy, than any other market. The yen is up 3.1 percent from a five-month low on April 5 after Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow said China should cease trying to prevent the yuan from appreciating.
Zhou, who heads the People's Bank of China, said on April 23 their opinions may be taken into account. ``If there is more pressure from outside, it will force us to speed up our reform,'' he said at the Boao Forum on the Chinese island of Hainan. He gave no timetable.
Bullish on Yen
Sixty percent of the 70 strategists, investors and traders polled by Bloomberg on April 22 from Sydney to New York advised buying yen against the dollar, double the previous week. Fifty- nine percent said to buy Japan's currency versus the euro.
``The market has jumped onto China as an issue,'' said Kamal Sharma, a currency strategist in London at Dresdner Kleinwort Wasserstein. ``It started off with the Snow comments after the G-7 meeting and then we had Greenspan comments, which are having an impact. The dollar has definitely gone lower on this.''
Zhou, President Hu Jintao and Premier Wen Jiabao are among Chinese officials who have said over the past two years they are prepared to let the yuan trade more freely. Still, ``we don't see that the pressure is that strong right now,'' Zhou said.
China ``will positively, but prudently, accelerate the process of reform of the renminbi exchange rate,'' Wei Benhua, deputy director of the State Administration of Foreign Exchange, said yesterday.
`Ticking Over'
Complaints from the Bush administration and Congress will spur more buying of the yen this week, said Tony Norfield, global head of currency strategy at ABN Amro Holding NV in London.
``We are not looking for a move by China until the fourth quarter, but the noises coming from the U.S. will keep the issue ticking over and lift Asian currencies, including the yen,'' he said. Norfield recommended on April 21 that clients wager on the yen's advance versus the euro.
Japanese investors are more bearish on the dollar versus the yen, according to a survey of clients by the Bank of Tokyo Mitsubishi Ltd.
The proportion of customers who said they were dollar ``bears'' increased to 29.6 percent from 19 percent the week before. The number of ``bulls'' fell to 18.5 percent from 33.3 percent, the survey showed.
Bank of Tokyo-Mitsubishi, a unit of Japan's second-largest Lender by assets, each Friday surveys about 40 Japanese companies, including exporters, importers and foreign banks in Japan, on their outlook for the dollar against the yen.
To contact the reporter on this story:
John Brinsley at At jbrinsley@bloomberg.net
Last Updated: April 24, 2005 18:58 EDT
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