Latest Stories

Yen tumbles in Asia as new Japan PM takes office

A bank clerk (R) counts bank notes as a customer purchases tickets for the 600 million yen (7.3 million USD) year-end Jumbo Lottery in Tokyo on November 26, 2012. Thousands of punters queued up for tickets in the hope of becoming a millionaire. AFP / YOSHIKAZU TSUNO

TOKYO – The yen tumbled to a 20-month low in Asian trading Wednesday amid expectations that incoming Japanese premier Shinzo Abe would push for aggressive monetary easing to boost the nation’s limp economy.

The greenback bought 85.17 yen in Tokyo midday trade after topping 85.00 yen for the first time since April 2011.

The US unit briefly surged to 85.35 yen, well above a postwar low of 75.32 yen hit late last year as markets turned to the yen as a safe-haven amid turmoil in debt-hit Europe and a slowing global economy.

The yen’s weakness also stemmed from minutes of the Bank of Japan’s November policy meeting, released Wednesday, which hinted at further easing measures, dealers said. Easing tends to weigh on a national currency.

The euro, meanwhile, was also stronger against the Japanese currency at 112.27 yen from 111.77 yen on Tuesday while it was flat at $1.3181.

The sagging yen gave Tokyo’s stock market a boost as it helps Japanese exporters by making their products more competitive overseas and raises the value of firms’ repatriated foreign income.

The Japanese currency has been on the decline after Abe, whose Liberal Democratic Party won a landslide national election last week, steps up pressure on the central bank to take bold easing steps.

The dollar is likely to trade in a 84.50-85.30 range, with holiday-season trading expected to be relatively subdued, said Osao Iizuka, head of forex trading at Sumitomo Mitsui Trust Bank.

“The bottom line is that the dollar will likely rise further next year amid expectations that the Fed will exit loose monetary policy earlier than the BoJ,’ he told Dow Jones Newswires.

Abe is to be named prime minister later Wednesday, after he swept to power on a hawkish platform of getting tough on diplomacy while fixing the economy with active fiscal spending and monetary easing.

On Sunday, he threatened to change a law guaranteeing the central bank’s independence if it did not agree to set a two-percent inflation target, in a bid to drag Japan out of the deflation that has haunted its economy for years.

Last week, Japan’s central bank launched its third major round of easing since September, after its counterparts in the US and Europe also unleashed huge measures. The move was widely seen as a bow to Abe’s pressure campaign.

Abe, who previously served as prime minister from 2006 to 2007, is expected to name Taro Aso, another former prime minister in Japan’s revolving-door political system, as both his deputy and finance minister, reports said.

As premier in 2008-2009, Aso launched a series of economic stimulus packages worth hundreds of billions of dollars.

The new government in Tokyo has announced a spending package worth about $118 billion to help inject some life into the world’s third-largest economy.

But the longer-term impact on the yen could be a loss of faith in the currency in the midst of heavy political pressure to stoke inflation, said Mizuho Securities chief market economist Yasunari Ueno.

“I wonder if this recent yen weakening is gradually changing in nature to a ‘bad yen weakness’ due to the damage done to trust in the yen on the back of a mere correction from excessive yen strength,” he said.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , Forex , Japan , Yen

  • TagaMlang

    “The sagging yen gave Tokyo’s stock market a boost as it helps Japanese exporters by making their products more competitive overseas and raises the value of firms’ repatriated foreign income.”
    This is good for Japan.  In the 80s, the Yen was trading at over Y120 to a Dollar, and Japan became awash with money that they started buying US companies.  

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Drunk passenger triggers Bali hijack alert
  • Businesswoman allegedly killed by husband, brother-in-law
  • Roxas suspended from golf club for outburst over P5,000 guest fee
  • SC reschedules oath-taking of new lawyers
  • Ex-COA chief seeks bail after arrest for plunder
  • Sports

  • Guiao fined P100,000 for ‘mongoloid’ comment vs Meralco forward
  • Hawks and Grizzlies revel in home wins
  • Floyd: Manny’s power gone
  • Michael Phelps loses to Lochte in comeback meet
  • Sharapova advances to Stuttgart quarterfinals
  • Lifestyle

  • ‘Recovered’ Banksy works on display ahead of sale
  • Marinduque: Visiting the ‘palm of the ocean’
  • First at Vatican in 60 years
  • How Jing Monis Salon gave Krissy the pixie
  • Want to be a supermodel? Work on your inner beauty, says Joey Espino
  • Entertainment

  • Paul McCartney to play at Candlestick concert
  • Kristoffer Martin: from thug to gay teen
  • Has Ai Ai fallen deeply with ‘sireno?’
  • California court won’t review Jackson doctor case
  • Cris Villonco on play adapted from different medium
  • Business

  • PAL hailed for ban on shark fin cargo
  • BSP to change tint of P100 bill
  • Nielsen sees car buying boom in the Philippines
  • How author of best-seller exposed ‘one percent’ economic elite
  • Bangko Sentral readies new bank lending rules
  • Technology

  • Cloud strength helps Microsoft earnings top Street
  • Vatican announces hashtag for April 27 canonizations
  • Enrile in Masters of the Universe, Lord of the Rings?
  • Top Traits of Digital Marketers
  • No truth to viral no-visa ‘chronicles’
  • Opinion

  • Corruption not invincible after all
  • Editorial Cartoon, April 25, 2014
  • No deal, Janet
  • Like making Al Capone a witness vs his gang
  • MERS-CoV and mothers
  • Global Nation

  • Plane lands at Bali airport in suspected hijacking—Indonesia air force
  • Obama lands in Seoul as N. Korea nuclear test fears grow
  • Militant protests vs Obama, US set
  • Filipinos second-shortest in Southeast Asia
  • China welcomes PH apology
  • Marketplace