Yen under renewed pressure, hits fresh lows

SYDNEY Tue Mar 12, 2013 4:51am IST

1 of 3. A picture illustration taken with the multiple exposure function of the camera shows a one Euro coin and a map of Europe, January 9, 2013.

Credit: Reuters/Kai Pfaffenbach

Related Topics

SYDNEY (Reuters) - The yen carved out a fresh 3-1/2 year low versus the greenback on Tuesday and fell to a 4-1/2 year trough on the Australian dollar as investors reacted to a media report that the Bank of Japan might deliver bold stimulus sooner than expected.

The Nikkei said the nominee for BOJ governor, Haruhiko Kuroda, had hinted on Monday he may launch new monetary easing steps soon after he takes office next week, rather than wait for the bank's first regular policy board meeting in early April.

The dollar rose as high as 96.67 yen, pipping the previous high of 96.60, while the Australian dollar touched 99.33, a level not seen since August 2008. The euro, meanwhile, traded at 125.91 yen, not far from a 34-month high around 127.71 reached last month.

The moves came against a backdrop of improving risk sentiment with the Dow .DJI closing at yet another record high, while Wall Street's "fear gauge", the CBOE Volatility Index .VIX, hit its lowest since February 2007. U.S. Treasuries fell as a result.

"Dollar/yen was already very bid overnight, consistent with the backup in U.S. Treasury yields. The Nikkei story has just given it a bit of a kick and it's certainly adding to yen weakness," said Sue Trinh, senior currency strategist at RBC in Hong Kong.

"Speculation of an inter-meeting easing is probably going to be a focus on the day. It won't be unprecedented to call an unscheduled meeting...it's not about emergency easing but if he were to do so, it's more symbolic and a signal to markets that he does mean business."

Against the dollar, the common currency stood at $1.3033, having recovered around half of Friday's slide from $1.3135 to $1.2955. That saw the dollar index .DXY retreat from a seven-month peak of 82.924 to 82.658.

The dollar had rallied sharply on Friday after a closely watched report showed U.S. employers added more workers than expected, pushing the unemployment rate to a four-year low.

Japanese wholesale prices for February are due next, followed by a survey on Australian business confidence and India's consumer prices.

The previous report showed business confidence in Australia rebounded in January.

"We would need another decent print to contain Reserve Bank of Australia rate cut expectations and support AUD on crosses," said Kiran Kowshik, strategist at BNP Paribas.

(Editing by Wayne Cole)

FILED UNDER:

Fast-tracking Projects

REUTERS SHOWCASE

Oil Prices

Oil Prices

Brent oil rises above $62 as energy firms slash investments  Full Article 

Space Programme

Space Programme

ISRO tests its heaviest space launch vehicle, eyes global market   Full Article 

Coal India Strike

Coal India Strike

Coal India workers threaten five-day strike, stokes output worries  Full Article 

Gold Discount

Gold Discount

Dealers offer gold discount for first time in five months  Full Article 

Lakhvi Granted Bail

Lakhvi Granted Bail

Pakistan court bails man accused of masterminding Mumbai attack  Full Article 

GST Bill

GST Bill

Cabinet clears bill for nationwide goods and services tax.  Full Article 

Aviation Sector

Aviation Sector

Breakingviews: SpiceJet rescue is no fix for India aviation woes.  Full Article 

Global Economy

Global Economy

Fed confident on U.S. growth, opens door wider to rate hike.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage