BLBG: Yen Falls to Two-Week Low Against Kiwi on Asia Recovery Signs
By Yoshiaki Nohara and Ron Harui
March 10 (Bloomberg) -- The yen declined to a two-week low against New Zealand’s dollar on speculation Japan’s economic recovery will lag behind the rest of the Asia-Pacific region.
Japan’s currency also traded near its lowest level in two weeks against the Australian dollar after a Chinese report today showed exports increased the most in three years, damping demand for the yen as a refuge. The pound slid versus 14 of its 16 major counterparts before a U.K. report that economists said will show manufacturers increased production at a slower pace.
“Asia-Pacific economies are probably recovering more quickly than those elsewhere, for example, in Japan,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. “There’s a bias to buy currencies in the region against the yen.”
The yen fell to 63.53 per New Zealand dollar at 6:34 a.m. in London from 63.24 in New York yesterday. It earlier slid to 63.63, the weakest since Feb. 23. The currency fetched 82.40 per Australian dollar from 82.24, after reaching a two-week low of 82.54 on March 8. The yen was little changed at 122.48 per euro, and bought 90.07 per dollar from 89.97.
The greenback traded at $1.3599 per euro from $1.3602. The pound dropped to $1.4974 from $1.4997, after touching $1.4937 yesterday, the lowest since March 2.
Australia’s dollar reached 61.220 pence, its strongest since 1985 versus the pound, and 0.6737 euro, the most since 1997.
‘Good’ Chinese Data
The yen fell against 13 out of 16 major currencies after China’s customs bureau said exports rose 45.7 percent in February from a year earlier, the third monthly increase and the biggest gain since February 2007. The figure was expected to rise 38.3 percent, according to a Bloomberg News survey.
“Good data out of China will put selling pressure on the yen,” said Toshiya Yamauchi, manager of currency margin trading at Ueda Harlow Ltd. in Tokyo. “China’s officials are aiming for an economic growth as strong as last year.”
A Japanese government report today showed machinery orders dropped 3.7 percent in January from the previous month, indicating a subdued appetite among the nation’s companies to ramp up capital spending even as manufacturing passed its worst.
The pound fell for a third day against the dollar. Output in the U.K. expanded 0.2 percent in January from December, when it increased 0.9 percent, according to a Bloomberg News survey of economists. The Office for National Statistics releases the data today in London.
U.K. Economy
“It’s not that one thing is particularly bad, but the overall U.K. economic outlook is weak, which keeps a lid on the pound,” said Akira Nakajima, a dealer in Tokyo at SBI Liquidity Market Co., a unit of financier SBI Holdings Inc. “Recent economic data have been rather negative, and investors need to keep a negative view on the pound.”
Bank of England officials last week left the benchmark interest rate unchanged at 0.5 percent and kept the asset- purchase program on hold for a second month. Central bank Governor Mervyn King has said the economy faces a “gradual recovery” from the recession and has pledged to aid the pickup by buying more bonds if needed.
The euro fell to the lowest level against the Australian dollar since 1997 as Greece struggles to cut its budget deficit of 12.7 percent of gross domestic product, the largest in Europe.
Fitch Ratings Director Christopher Pryce said yesterday at a conference in London that while the outlook for Greece is “probably OK” in the short term, prospects in the next six to nine months are less certain. There are “already the beginnings of dissent within the Greek Cabinet,” Pryce said.
‘Difficult to Buy’
“Money needs to come from other nations in the euro-zone in order to rescue Greece,” said Yoshihiro Nomura, a Tokyo- based foreign-exchange team manager at Trust & Custody Services Bank Ltd. “It’s still difficult to buy the euro.”
The greenback fell against New Zealand’s dollar for a fourth day and traded near a two-month low against Canada’s currency after Federal Reserve Bank of Chicago President Charles Evans said yesterday he expects the Fed will likely hold its target rate target low for the next “three or four meetings.” He reiterated his support for the Fed’s guidance that rates will stay low for an “extended period.”
“With the unemployment rate at 9.7 percent and inflation significantly under my benchmark for price stability, there is no conflict between our policy goals,” Evans said in the text of a speech in Arlington, Virginia. Weakness in the job market, including long-term unemployment, means that “this accommodation will likely be appropriate for some time.”
Interest-rate futures in Chicago yesterday showed a 41 percent chance U.S. policy makers would raise the target lending rate by at least a quarter-percentage point to 0.5 percent by September. The probability was 43 percent a day ago.
The greenback dropped to 70.53 cents per New Zealand dollar from 70.29 cents. It earlier touched 70.68 cents, the weakest since Feb. 17. The U.S. currency fetched C$1.0276 from C$1.0261 in New York yesterday, when it reached C$1.0236, the lowest since Jan. 15.
