BLBG: Yen Rises From Two-Week Low; Asian Mining, Bank Stocks Decline
By Shiyin Chen
Sept. 16 (Bloomberg) -- The yen strengthened from a two- week low versus the dollar a day after Japan intervened, triggering the currency’s biggest drop in 22 months. Mining stocks and banks led Asian stocks lower.
The yen traded at 85.37 per dollar at 3:10 p.m. in Tokyo from 85.75 in New York yesterday, when it depreciated 3.3 percent. The MSCI Asia Pacific Index lost 0.7 percent to 123.19. Futures for the Standard & Poor’s 500 Index and the Euro Stoxx 50 decreased 0.4 percent. New Zealand’s dollar retreated 1 percent to 72.34 U.S. cents after the nation’s central bank left interest rates unchanged. Wheat increased as much as 1.5 percent.
Prime Minister Naoto Kan today pledged to continue taking “decisive measures when necessary” after the government sold the yen to prevent gains against the dollar from undermining exports that are key to bolstering its economy. U.S. Treasury Secretary Timothy F. Geithner will tell the Senate Banking Committee today that the government is considering ways to urge China to let the yuan rise faster.
“The yen is really overvalued in a number of respects and Japan could use a weaker currency,” said David Gerstenhaber, founder of New York-based Argonaut Management LP, in a Bloomberg Television interview. “My suspicion is that they’re not done and that we’ll see more action out of them. But the market obviously will test them.”
More than two stocks declined for each that rose on the MSCI Asian index. BHP Billiton Ltd., the world’s largest mining company, dropped 1.9 percent in Sydney as prices of copper, nickel and tin retreated. China Construction Bank Corp. fell 2.2 percent in Shanghai trading on speculation the nation’s biggest lenders may be required to boost their capital adequacy ratios.
Sony Gains
Losses in mining and financial shares were countered by gains in Japanese automakers and technology companies. Sony Corp., the maker of Bravia televisions and PlayStation 3 game consoles, gained 1.7 percent. The company expects the government to continue taking “appropriate measures,” Mami Imada, a spokeswoman, said in an e-mailed statement.
The yen reached 85.78 in New York yesterday, the weakest since Aug. 30. Even after the government’s intervention, the Japanese currency’s current level against the dollar is still stronger than the 90.16 average estimated by large manufacturers for the six months to March 2011 in the Bank of Japan’s Tankan survey released July 1.
“Obviously, exporters are likely to buy the yen,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate & Investment Bank in Tokyo. “In addition, Japanese companies may repatriate income from abroad as the fiscal half-year-end in September is getting closer.”
‘More Moderate’
New Zealand’s currency weakened after Reserve Bank of New Zealand Governor Alan Bollard today left the overnight cash rate at 3 percent, which compares with 4.5 percent in Australia and close to zero in Japan and the U.S.
“While the global and domestic economies continue to recover, the outlook has weakened since our June statement,” Bollard said today. Further increases in the key rate are “likely to be more moderate than was projected.”
China’s yuan advanced for a sixth day, rising 0.2 percent to 6.7323 after touching 6.7270, the most since 1993. Geithner will say today the pace of the yuan’s appreciation has been “too slow” while the gains have been “too limited,” according to his testimony prepared for the Senate Banking Committee hearing.
The hearing today comes as the Commerce Department releases the U.S. current account balance for the second quarter. The deficit, the broadest measure of international trade, probably widened to $125 billion, according to the median forecast in a Bloomberg survey of economists. A separate report today may show initial jobless claims rose to 459,000 last week from 451,000 in the previous period, according a Bloomberg News survey.
Wheat futures advanced to as much as $7.3775 a bushel in Chicago after Russia said planting of the winter crop was lagging behind last year’s pace. Russian farmers had planted 5.8 million hectares (14.3 million acres) of the winter crop so far, compared with 10.8 million hectares as of Sept. 16, 2009, according to the Agriculture Ministry.
Among other commodities, copper futures on the London Metal Exchange fell as much as 0.6 percent. Nickel declined 1.4 percent.
To contact the reporter for this story: Shiyin Chen in Singapore at schen37@bloomberg.net
