BLBG: Yen Trades Near One-Week High Against Euro Before China Inflation Report
The yen traded near a one-week high against the euro before a report that economists said will show China’s consumer-price inflation accelerated last month, fueling concern the central bank will take more measures to cool growth.
The euro was close to the lowest in three weeks versus the greenback on speculation European finance ministers meeting for a second day today will fail to agree on measures to shield Portugal from the region’s debt crisis. Australia’s dollar traded about 0.2 percent below this year’s high versus New Zealand’s before the larger South Pacific nation’s central bank releases minutes of this month’s policy meeting.
“China’s strong CPI data may suggest the pace of tightening is too slow,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin-trading services. “The yen is likely to be bought should stocks decline following the data, cooling risk sentiment in the markets.”
The yen traded at 112.37 per euro as of 8:31 a.m. in Tokyo from 112.40 in New York yesterday, when it rose to 112.09, the strongest since Feb. 9. Japan’s currency was at 83.33 per dollar from 83.32. The euro bought $1.3486 from $1.3489 yesterday, when it dropped to $1.3428, the weakest since Jan. 20.
The Australian dollar was at NZ$1.3263 from NZ$1.3252 yesterday, when it climbed to NZ$1.3284, the most since Dec. 29.
Chinese consumer prices advanced 5.4 percent in January from a year earlier, the most since July 2008, according to a Bloomberg survey before today’s report.
‘Stable’ Markets
German Finance Minister Wolfgang Schaeuble told reporters yesterday “stable” financial markets ease pressure for a boost in the Europe’s 440 billion-euro ($593 billion) rescue fund.
“The markets are so stable right now that it’s better not to unsettle them with superfluous discussions,” Schaeuble said before European finance ministers met yesterday in Brussels.
The finance chiefs emerged from yesterday’s session without announcing immediate steps to counter the debt crisis. Luxembourg’s Jean-Claude Juncker, who leads the group of euro- area finance ministers, said the lending capacity for the permanent stability mechanism to be established in 2013 will be 500 billion euros and will be regularly monitored.
-- Editors: Nicholas Reynolds
To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Ronnie Harui in Singapore at rharui@bloomberg.net.
To contact the editor responsible for this story: Nicholas Reynolds at nreynolds2@bloomberg.net.
