Australian, N.Z. Dollars Fall Versus Versus Yen After BOJ Meets
August 30, 2010, 7:54 AM EDT
By Yoshiaki Nohara
Aug. 30 (Bloomberg) -- The Australian and New Zealand dollars fell against the yen on speculation the Bank of Japan’s decision to expand its loan program will fail to halt the currency’s appreciation.
Australia’s currency also trimmed its advance versus the greenback as the size of the BOJ’s step disappointed some analysts and caused Asian stocks to unwind some of their earlier advance. Demand for New Zealand’s dollar was tempered after a government report showed the nation posted a trade deficit in July for the first time in seven months.
“The BOJ didn’t go beyond the market’s expectations such as buying more government bonds, disappointing investors,” said Takuya Kawabata, a researcher in Tokyo at Gaitame.Com Research Institute Ltd., a unit of Japan’s largest foreign-exchange margin company. “As a result, cross currencies are paring gains against the yen.”
Australia’s dollar dropped to 76.30 yen as of 4:30 p.m. in Sydney from 76.62 yen in New York last week, after earlier rising TO 77.52, the strongest since Aug. 18. The currency was at 89.82 U.S. cents from 89.89 cents. New Zealand’s dollar fell to 60.38 yen from 60.56 yen, and traded at 71.04 cents from 71.09 cents.
The BOJ said after an emergency meeting in Tokyo it would boost the amount of funds in its loan facility by 10 trillion yen ($116 billion) to 30 trillion yen. Governor Masaaki Shirakawa led the gathering after cutting short a U.S. trip in the wake of increasing calls from politicians for the BOJ to help stem a surge in the yen to a 15-year high.
There is a risk the Bank of Japan may have to lower its economic view and the central bank is prepared to take more action if necessary, Shirawaka said to reporters today.
‘Big Gun’
The BOJ’s decision reflects rising concern about growth in advanced economies and follows comments from Federal Reserve Chairman Ben S. Bernanke last week that the U.S. is open to further measures if needed to avert another recession.
“Bernanke has made clear he intends to maintain a buffer against deflation and has his finger on the quantitative easing trigger,” said Nicholas Smith, director of equity research at MF Global FXA Securities Ltd. in Tokyo. “Japan may decide to pull out its big gun, but Bernanke has the most powerful handgun in the world. You’ve got to ask yourself one question: do I feel lucky? Don’t count on significant weakening of the yen.”
The MSCI Asia Pacific Index of shares advanced 1 percent, after earlier rising as much as 1.6 percent.
Trade Deficit
The New Zealand dollar snapped a two-day gain versus the greenback as the statistics bureau said the nation posted a trade deficit of NZ$186 million ($132 million) in July from a revised NZ$214 million surplus the previous month.
New Zealand’s commodity-export prices fell for a second month in July, led by dairy, beef and lumber, according to an ANZ National Bank Ltd. index.
Australian government bonds fell for a third day. The yield on the benchmark 10-year note gained three basis points to 4.84 percent, according to data compiled by Bloomberg. The 4.5 percent security due April 2020 declined 0.21, or A$2.10 per A$1,000 face amount, to 97.44.
New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose four basis points to 3.78 percent.
August 30, 2010, 7:54 AM EDT
By Yoshiaki Nohara
Aug. 30 (Bloomberg) -- The Australian and New Zealand dollars fell against the yen on speculation the Bank of Japan’s decision to expand its loan program will fail to halt the currency’s appreciation.
Australia’s currency also trimmed its advance versus the greenback as the size of the BOJ’s step disappointed some analysts and caused Asian stocks to unwind some of their earlier advance. Demand for New Zealand’s dollar was tempered after a government report showed the nation posted a trade deficit in July for the first time in seven months.
“The BOJ didn’t go beyond the market’s expectations such as buying more government bonds, disappointing investors,” said Takuya Kawabata, a researcher in Tokyo at Gaitame.Com Research Institute Ltd., a unit of Japan’s largest foreign-exchange margin company. “As a result, cross currencies are paring gains against the yen.”
Australia’s dollar dropped to 76.30 yen as of 4:30 p.m. in Sydney from 76.62 yen in New York last week, after earlier rising TO 77.52, the strongest since Aug. 18. The currency was at 89.82 U.S. cents from 89.89 cents. New Zealand’s dollar fell to 60.38 yen from 60.56 yen, and traded at 71.04 cents from 71.09 cents.
The BOJ said after an emergency meeting in Tokyo it would boost the amount of funds in its loan facility by 10 trillion yen ($116 billion) to 30 trillion yen. Governor Masaaki Shirakawa led the gathering after cutting short a U.S. trip in the wake of increasing calls from politicians for the BOJ to help stem a surge in the yen to a 15-year high.
There is a risk the Bank of Japan may have to lower its economic view and the central bank is prepared to take more action if necessary, Shirawaka said to reporters today.
‘Big Gun’
The BOJ’s decision reflects rising concern about growth in advanced economies and follows comments from Federal Reserve Chairman Ben S. Bernanke last week that the U.S. is open to further measures if needed to avert another recession.
“Bernanke has made clear he intends to maintain a buffer against deflation and has his finger on the quantitative easing trigger,” said Nicholas Smith, director of equity research at MF Global FXA Securities Ltd. in Tokyo. “Japan may decide to pull out its big gun, but Bernanke has the most powerful handgun in the world. You’ve got to ask yourself one question: do I feel lucky? Don’t count on significant weakening of the yen.”
The MSCI Asia Pacific Index of shares advanced 1 percent, after earlier rising as much as 1.6 percent.
Trade Deficit
The New Zealand dollar snapped a two-day gain versus the greenback as the statistics bureau said the nation posted a trade deficit of NZ$186 million ($132 million) in July from a revised NZ$214 million surplus the previous month.
New Zealand’s commodity-export prices fell for a second month in July, led by dairy, beef and lumber, according to an ANZ National Bank Ltd. index.
Australian government bonds fell for a third day. The yield on the benchmark 10-year note gained three basis points to 4.84 percent, according to data compiled by Bloomberg. The 4.5 percent security due April 2020 declined 0.21, or A$2.10 per A$1,000 face amount, to 97.44.
New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose four basis points to 3.78 percent.