Yen tumbles on aggressive BOJ; U.S. jobs weigh on stocks

SYDNEY Mon Apr 8, 2013 4:49am IST

1 of 4. Pedestrians holding umbrellas stand in front of a stock index board showing various stock prices outside a brokerage in Tokyo April 3, 2013.

Credit: Reuters/Yuya Shino

Related Topics

SYDNEY (Reuters) - The yen resumed its precipitous slide early Monday to hit fresh lows against a host of major currencies as reports the Bank of Japan would begin buying longer-dated bonds immediately underlined its determination to beat deflation.

Asia-Pacific stock markets were set to open slightly lower, weighed on by a weaker-than-expected U.S. employment reading which fuelled concerns that the recovery in the world's largest economy may be losing steam.

The U.S. dollar jumped a full yen in early Asian trading to hit 98.78 yen, the highest since June 2009. The euro climbed as far as 128.32 yen, its highest since January 2010.

Dealers were impressed by a Nikkei report the central bank would this week buy 1.2 trillion yen of government bonds with a maturity of over five years, showing a sense of urgency alien to the BOJ of old.

Yields on benchmark 10-year Japanese government bonds sank to a record low of 0.315 percent on Friday.

Analysts assume the flood of new money will be partly used by Japanese investors to buy higher yielding assets abroad, so putting downward pressure on the yen.

"We have re-established a broad basket of JPY shorts in light of last week's BOJ aggressive actions," wrote analysts from JPMorgan in a client report. "Radical monetary measures were needed to re-invigorate the downtrend in the yen, and on this front the BOJ has over delivered."

JPMorgan had re-established long positions in USD/JPY and also favored the Australian dollar and Brazilian real as carry trades against the yen.

The Aussie dollar soared to 102.32 yen, the highest since July 2008.

Australian stocks were set to open marginally lower, while New Zealand's market .NZ50 fell 0.1 percent in early trade, out-performing global stock market losses following Friday's U.S. non-farm payrolls report.

U.S. employers hired at the slowest pace in nine months in March, adding just 88,000 nonfarm jobs, the Labor Department said, below an expected 200,000. The jobless rate ticked a tenth of a point lower to 7.6 percent, but the drop was largely due to people dropping out of the work force.

The soft jobs report also weighed on energy and industrial metals, with Brent crude futures hovering near an eight-month low hit on Friday and copper also in sight of its lowest since August 2012.

(Editing by John Mair)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Cipla Shares

Cipla Shares

Cipla jumps after key generic launch.  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit.  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks.  Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter.  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past.  Full Article 

Reuters India Mobile

Reuters India Mobile

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