June 2 (Bloomberg) -- The yen fell against its major counterparts amid speculation Finance Minister Naoto Kan will succeed Prime Minister Yukio Hatoyama and pursue measures to weaken the currency.
The yen declined to the lowest level in two weeks against the dollar after Hatoyama tendered his resignation today as public criticism mounted over his handling of U.S. troop deployments in Okinawa. The euro stayed near its weakest level in four years versus the dollar amid speculation the European Central Bank will tolerate a weaker single currency.
“Markets have been slightly suspicious of Kan’s attitude to the currency,” said Adam Cole, head of global currency strategy at Royal Bank of Canada in London. “He has said that most businesses would prefer a weaker yen and hence the fall.”
The yen depreciated to 91.98 per dollar at 6:58 a.m. in New York, from 90.94 yesterday, after reaching 92, the weakest since May 19. It traded at 112.48 per euro, from 111.22. The euro was at $1.2234, from $1.2229 yesterday, when it touched $1.2111, the lowest since April 2006.
Kan said on his first day as finance chief on Jan. 7 that he wants the currency to weaken “a bit more” after it declined from a 14-year high of 84.83 per dollar in November. He said manufacturers think a range of 90 to the mid-90s is desirable. A stronger yen may erode profits from exporters, who led Japan’s recovery from its worst postwar recession.
Weak-Yen Advocate
Deputy premier Kan, together with National Strategy Minister Yoshito Sengoku and Foreign Minister Katsuya Okada, are likely candidates to replace Hatoyama, said Gerald Curtis, a professor of Japanese politics at Columbia University in New York.
“If Kan, who is an advocate for a weak yen, replaces Hatoyama, investors’ expectations will strengthen for the yen to decline,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest banking group.
Ichiro Ozawa, the ruling Democratic Party of Japan’s top campaign strategist, will also step down as secretary-general, Hatoyama said. The resignations come less than two months before mid-term elections, potentially hindering the DPJ’s efforts to reduce public debt.
Hatoyama stepped down less than a week after the Social Democratic Party left the ruling coalition, following a clash over the relocation of the Futenma Marine Air Base in Okinawa. The government will retain power regardless of the result of upper-house elections this summer because of its majority in the lower chamber.
No ‘Extraordinary Level’
The euro stayed near its four-year low against the dollar on concern that Europe’s efforts to rein in budget deficits will hamper the region’s economic revival.
ECB Governing Council member Christian Noyer said the euro’s current rate is “by no means an extraordinary level,” Germany’s Handelsblatt reported, citing an interview.
European Commission President Jose Manuel Barroso meanwhile called for a “commitment to keep the euro a strong and credible currency” during a news conference today in Vilnius, Lithuania.
Options traders are the most bearish on the euro in at least seven years amid concern that Europe’s banks will face difficulties weathering the region’s sovereign-debt crisis. The premium charged for the right to sell the euro in three months over contracts to buy the currency touched 3.35 percent, the most since Bloomberg began compiling the data in 2003.
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Thursday, June 03, 2010
Bloomberg News
June 2 (Bloomberg) -- The yen fell against its major counterparts amid speculation Finance Minister Naoto Kan will succeed Prime Minister Yukio Hatoyama and pursue measures to weaken the currency.
The yen declined to the lowest level in two weeks against the dollar after Hatoyama tendered his resignation today as public criticism mounted over his handling of U.S. troop deployments in Okinawa. The euro stayed near its weakest level in four years versus the dollar amid speculation the European Central Bank will tolerate a weaker single currency.
“Markets have been slightly suspicious of Kan’s attitude to the currency,” said Adam Cole, head of global currency strategy at Royal Bank of Canada in London. “He has said that most businesses would prefer a weaker yen and hence the fall.”
The yen depreciated to 91.98 per dollar at 6:58 a.m. in New York, from 90.94 yesterday, after reaching 92, the weakest since May 19. It traded at 112.48 per euro, from 111.22. The euro was at $1.2234, from $1.2229 yesterday, when it touched $1.2111, the lowest since April 2006.
Kan said on his first day as finance chief on Jan. 7 that he wants the currency to weaken “a bit more” after it declined from a 14-year high of 84.83 per dollar in November. He said manufacturers think a range of 90 to the mid-90s is desirable. A stronger yen may erode profits from exporters, who led Japan’s recovery from its worst postwar recession.
Weak-Yen Advocate
Deputy premier Kan, together with National Strategy Minister Yoshito Sengoku and Foreign Minister Katsuya Okada, are likely candidates to replace Hatoyama, said Gerald Curtis, a professor of Japanese politics at Columbia University in New York.
“If Kan, who is an advocate for a weak yen, replaces Hatoyama, investors’ expectations will strengthen for the yen to decline,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest banking group.
Ichiro Ozawa, the ruling Democratic Party of Japan’s top campaign strategist, will also step down as secretary-general, Hatoyama said. The resignations come less than two months before mid-term elections, potentially hindering the DPJ’s efforts to reduce public debt.
Hatoyama stepped down less than a week after the Social Democratic Party left the ruling coalition, following a clash over the relocation of the Futenma Marine Air Base in Okinawa. The government will retain power regardless of the result of upper-house elections this summer because of its majority in the lower chamber.
No ‘Extraordinary Level’
The euro stayed near its four-year low against the dollar on concern that Europe’s efforts to rein in budget deficits will hamper the region’s economic revival.
ECB Governing Council member Christian Noyer said the euro’s current rate is “by no means an extraordinary level,” Germany’s Handelsblatt reported, citing an interview.
European Commission President Jose Manuel Barroso meanwhile called for a “commitment to keep the euro a strong and credible currency” during a news conference today in Vilnius, Lithuania.
Options traders are the most bearish on the euro in at least seven years amid concern that Europe’s banks will face difficulties weathering the region’s sovereign-debt crisis. The premium charged for the right to sell the euro in three months over contracts to buy the currency touched 3.35 percent, the most since Bloomberg began compiling the data in 2003.
The yen declined to the lowest level in two weeks against the dollar after Hatoyama tendered his resignation today as public criticism mounted over his handling of U.S. troop deployments in Okinawa. The euro stayed near its weakest level in four years versus the dollar amid speculation the European Central Bank will tolerate a weaker single currency.
“Markets have been slightly suspicious of Kan’s attitude to the currency,” said Adam Cole, head of global currency strategy at Royal Bank of Canada in London. “He has said that most businesses would prefer a weaker yen and hence the fall.”
The yen depreciated to 91.98 per dollar at 6:58 a.m. in New York, from 90.94 yesterday, after reaching 92, the weakest since May 19. It traded at 112.48 per euro, from 111.22. The euro was at $1.2234, from $1.2229 yesterday, when it touched $1.2111, the lowest since April 2006.
Kan said on his first day as finance chief on Jan. 7 that he wants the currency to weaken “a bit more” after it declined from a 14-year high of 84.83 per dollar in November. He said manufacturers think a range of 90 to the mid-90s is desirable. A stronger yen may erode profits from exporters, who led Japan’s recovery from its worst postwar recession.
Weak-Yen Advocate
Deputy premier Kan, together with National Strategy Minister Yoshito Sengoku and Foreign Minister Katsuya Okada, are likely candidates to replace Hatoyama, said Gerald Curtis, a professor of Japanese politics at Columbia University in New York.
“If Kan, who is an advocate for a weak yen, replaces Hatoyama, investors’ expectations will strengthen for the yen to decline,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest banking group.
Ichiro Ozawa, the ruling Democratic Party of Japan’s top campaign strategist, will also step down as secretary-general, Hatoyama said. The resignations come less than two months before mid-term elections, potentially hindering the DPJ’s efforts to reduce public debt.
Hatoyama stepped down less than a week after the Social Democratic Party left the ruling coalition, following a clash over the relocation of the Futenma Marine Air Base in Okinawa. The government will retain power regardless of the result of upper-house elections this summer because of its majority in the lower chamber.
No ‘Extraordinary Level’
The euro stayed near its four-year low against the dollar on concern that Europe’s efforts to rein in budget deficits will hamper the region’s economic revival.
ECB Governing Council member Christian Noyer said the euro’s current rate is “by no means an extraordinary level,” Germany’s Handelsblatt reported, citing an interview.
European Commission President Jose Manuel Barroso meanwhile called for a “commitment to keep the euro a strong and credible currency” during a news conference today in Vilnius, Lithuania.
Options traders are the most bearish on the euro in at least seven years amid concern that Europe’s banks will face difficulties weathering the region’s sovereign-debt crisis. The premium charged for the right to sell the euro in three months over contracts to buy the currency touched 3.35 percent, the most since Bloomberg began compiling the data in 2003.
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