CN: Yen gains on G20 disappointment, dollar climbs against euro
The Japanese yen rose broadly on Monday as investors sought safety after a statement from the Group of 20 countries offered no concrete action to address concerns about slow growth and low inflation. The yen has fully retraced Friday’s decline and was on track to post its best monthly performance against the dollar in more than seven years.
Against the euro, the yen was set to record its largest monthly percentage gain in more than a year. Weaker-than-expected data on the Chicago manufacturing sector and U.S. pending home sales data also pushed the dollar lower versus the yen. But it was the G20 statement that drove the yen to a great start on Monday.
Finance ministers and central bank governors from the G20 countries tried to ease fears about global growth prospects and also said they would consult closely on foreign exchange markets. But analysts believed world leaders remained far from formulating concerted action to counter trends in the currency market, or doing anything to boost global growth.
“The marketplace was hoping for some sort of verbiage addressing the fact that the yen has strengthened … over the last month or so,” said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago. “To ignore that, it gives people who want to be long yen a little bit more breathing room.”
The dollar was last down more than 1 percent against the yen, traditionally investors’ safe haven of choice in times of global stress, after hitting a session low of 112.67 yen. The euro was off 1.5 percent against the yen after hitting a session low of 122.47 yen. A Chicago manufacturing report for February, which showed the index fell to 47.6 from 55.6 in January, and data showing U.S. pending home sales fell an unexpected 2.5 percent last month, also boosted the yen.
