BLBG:Yen Jumps Most Since March 2011 as Aso Says Decline Was Too Fast
The yen jumped the most since March 2011 against the dollar after Japanese Finance Minister Taro Aso said its recent slide has been too rapid.
Japan’s currency headed for its first weekly gain versus the euro in two months after Aso told parliament in Tokyo that the “sudden move from 78 or 79 to 90 was not something we anticipated.” The euro advanced from a two-week low against the dollar. The Australian and New Zealand dollars gained versus the U.S. currency as China’s trade expanded more in January than economists forecast.
The yen “is vulnerable to concern that it has done way more than anyone thought it possibly could,” said Kit Juckes, head of foreign-exchange research at Societe Generale SA in London. “What’s going to matter as the market reacts to these kind of comments is how many people are queuing up” to sell it, he said.
The yen rose 1.3 percent to 92.43 per dollar at 10:22 a.m. London time after rising 1.6 percent, the biggest gain since March 17, 2011. The currency climbed 1.2 percent to 123.94 per euro after depreciating to 127.71 on Feb. 6, the weakest since April 2010. The euro advanced 0.1 percent to $1.3409.
Japan’s currency has tumbled 19 percent in the past six months, the worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, in anticipation of the greater monetary stimulus advocated by Shinzo Abe, who took office as prime minister in December.
Rapid Move
Aso told reporters in Tokyo today that the yen’s drop has been too fast, after earlier telling lawmakers the government hadn’t anticipated the yen’s rapid move to around 90 per dollar.
The yen also rallied versus the euro after European Central Bank President Mario Draghi said yesterday that recent currency gains may slow inflation and growth in the region.
“Aso’s statement encouraged some retracement,” said Derek Halpenny, head of global markets research at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “The yen was stronger anyway before these reported comments, and euro-yen selling after Draghi’s statement yesterday may also have helped trigger some broader yen correction.”
The Australian dollar rose for the first time in four days against the greenback after China’s government said exports gained 25 percent from a year earlier and imports rose 28.8 percent. China is Australia’s largest trading partner.
The so-called Aussie gained 0.5 percent to $1.0333 and New Zealand’s currency advanced 0.5 percent to 83.71 U.S. cents.
Currency volatility will probably increase this year as volumes increase, Citigroup Inc. said, citing trading platform and central bank figures.
Combined average daily volume on currency trading platforms by CME Group Inc., Thomson Reuters Corp. and ICAP Plc was $381 billion last month, up from $290 billion in December and $339 billion a year earlier, according to data compiled by Greg Anderson, Citigroup’s North American head of Group-of-10 currency in New York.
-- With assistance from Karen Yeung in Shanghai. Editors: Nicholas Reynolds, Keith Jenkins
To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
