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Yen jumps on financial minister's comment

Reported by AAP
Saturday, February 9, 2013
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The yen rallied on Friday after a key Japanese official said its recent tumble against the dollar was unexpected.

Japan's Finance Minister Taro Aso reportedly told the lower house budget committee that "the exchange rate has abruptly reached the 90 yen level ... in a manner we didn't anticipate."

Aso was commenting on the economic drive by Japan's new government of Prime Minister Shinzo Abe, which swept to power in December, to ease monetary policy, increase public spending and strive for economic growth.

The yen has tumbled about 10 per cent against the dollar since Abe took office in late December, sparking criticism that Japan was attempting competitive devaluation of its currency.

At 2200GMT (1100 AEDT), the dollar bought 92.70 yen, down from 93.61 yen at the same time Thursday.

The euro fell to 123.83 yen from 125.40 yen late on Thursday.

The euro continued to feel the drag from European Central Bank chief Mario Draghi's comments Thursday that gave a middling picture of the eurozone economy.

The European currency fetched $1.3361 compared with $1.3395 on Thursday.

Earlier in the day, the euro sank to $1.3350, its lowest level since January 25.

"The euro extended its decline in the wake of the European Central Bank's dovish monetary policy press conference," said Nick Bennenbroek of Wells Fargo Bank.

Investor sentiment "certainly wasn't helped by Draghi's rather downbeat comments yesterday, but in some ways he has helped because the last thing Europe needs right now is a stronger currency," said Michael Hewson at CMC Markets.

Against the Swiss currency, the dollar slipped to 0.9168 francs from 0.9183 francs late on Thursday, while the pound rose to $1.5796 from $1.5709.

Elsewhere in the currency market, the Venezuela government announced it was devaluing its currency by 32 per cent against the dollar on the orders of cancer-stricken President Hugo Chavez, who sees it as a way to boost economic growth.

The bolivar will be lowered to 6.3 to the dollar, from 4.3, it said.

01/11/2014 16:18Sydney, Australia. 1 November,2014
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