Yen rose against the dollar a third consecutive week, after a government report showed an unexpected increase in household spending in February. The acceleration in consumer spending, which accounted for over half the economy, suggests that Japan could expand its based on the export recovery. Faster growth has also spurred record purchases of Japanese stocks by foreign investors. Nikkei 225 Index gained 2.1% on Friday, reaching 22-month maximum.
"It is inevitable that the yen will continue to grow to 100 yen to the dollar," said in an interview in Tokyo, a former official of Japan's highest rate, and now professor of Kyoto University Eyzuke Sakakibara. Sakakibara was known as "Mr. Yen" when he was deputy finance minister since 1997. in 1999.
Yen on Friday rose to 106.01 yen / $ at 17:01 in New York level of 106.19 yen a day earlier, according to prices EBS. Yen, which earlier on Friday rose to the fifth peak - 105.55 yen / $, increased by 0.6% this week. Euro traded at $ 1.2132, changed from $ 1.2126 earlier.
Economic growth in Japan was a complete "surprise" for foreign investors, who were "extremely pessimistic are" about the prospects of the country, said Sakakibara.
The cost of Japanese households rose in February at 2.5% compared with January, while the median forecast of economists surveyed "Bloomberg News" showed a decrease of 1.7%. Expenditures in the U.S. grew by 0.2% last month.
Euro fell earlier on Friday, after "DeutscheBank AG", the third largest foreign exchange operator, said that he expects the European Central Bank reduce interest rates by 25 points by June.
CSFB forecast to lower rates
"The idea to reduce the rates of the ECB Davila at the Euro, because lower rates reduce the attractiveness of euro-denominated assets," said a senior foreign exchange trader "Bank Leumi USA" in New York, Joseph Barnea. Barnea said that the euro could fall to $ 1.20 in coming days.
"Credit Suisse First Boston" cut its forecast for the euro to $ 1.24 within three months from the previous $ 1.28. Change "is based on cutting-term rates in Europe, a more stable stock market and some evidence of further improvement in the American labor market", said in a statement CSFB.
Ifo business climate index in Germany fell in March to a minimum of five - from the February value of 95.4 - 96.4. The average forecast was - 95.7. The index of consumer confidence from the University of Michigan increased to 95.8 in March from 94.1.
"Ifo was slightly lower than expected, but I would not say that it is too disturbing for the euro," said director of the foreign exchange market from the "Nomura International" in London. "The market has become too bear" - Nomura had forecast that the index drop to 94.4.
Remarque Trichet
Expectations were lowered after the European Central Bank President Jean-Claude Trichet earlier this week said that the bank may lower its forecasts for growth in the euro, if consumer demand does not increase.
In addition to the increase in consumer spending in Japan, retail sales increased in February compared with January to 1.7%, according to the Ministry of Finance.
"Restoration of Japan extends to consumers," said currency strategist "Dresdner Kleinwort Wasserstein" in London, Sabrina Jacobs, which expects the yen to rise to 104 within three months.
Foreign investors last week bought a record number of shares after the Japanese growth in the fourth quarter reached its highest pace since 1990. Japanese shares have reached the maximum value this year.
Gross national product grew by 6.4% in the fourth quarter, compared with 4.1% in the U.S. and 1.2% in the euro area.
Bank of Japan
"Economic prospects for Japan's becoming more and more bright," said Akira Takey, which is an observer for the assets of approximately $ 9.2 billion in "FujiInvestment Management Co." in Tokyo. "There is a clear change in the estimates of Japan by foreign investors."
"The suggestion that Japan may sell its currency to protect exporters' earnings before the end of fiscal year March 31, may limit the growth of the currency," said currency strategist from "UBS Securities LLC" at Stamford Daniel Katzayv. "There is a possibility that the Bank of Japan intends to support the next stage in the movement to a level of 100 yen," he said. "The Bank of Japan - the only obstacle to ketomu intensity.
The central bank, ordered by the Ministry of Finance, sold 10.5 trillion. yen ($ 99.1 billion) over the past two months ended February 25. The Ministry will publish the March figures on Wednesday.
"It is inevitable that the yen will continue to grow to 100 yen to the dollar," said in an interview in Tokyo, a former official of Japan's highest rate, and now professor of Kyoto University Eyzuke Sakakibara. Sakakibara was known as "Mr. Yen" when he was deputy finance minister since 1997. in 1999.Yen on Friday rose to 106.01 yen / $ at 17:01 in New York level of 106.19 yen a day earlier, according to prices EBS. Yen, which earlier on Friday rose to the fifth peak - 105.55 yen / $, increased by 0.6% this week. Euro traded at $ 1.2132, changed from $ 1.2126 earlier.
Economic growth in Japan was a complete "surprise" for foreign investors, who were "extremely pessimistic are" about the prospects of the country, said Sakakibara.
The cost of Japanese households rose in February at 2.5% compared with January, while the median forecast of economists surveyed "Bloomberg News" showed a decrease of 1.7%. Expenditures in the U.S. grew by 0.2% last month.
Euro fell earlier on Friday, after "DeutscheBank AG", the third largest foreign exchange operator, said that he expects the European Central Bank reduce interest rates by 25 points by June.
CSFB forecast to lower rates
"The idea to reduce the rates of the ECB Davila at the Euro, because lower rates reduce the attractiveness of euro-denominated assets," said a senior foreign exchange trader "Bank Leumi USA" in New York, Joseph Barnea. Barnea said that the euro could fall to $ 1.20 in coming days.
"Credit Suisse First Boston" cut its forecast for the euro to $ 1.24 within three months from the previous $ 1.28. Change "is based on cutting-term rates in Europe, a more stable stock market and some evidence of further improvement in the American labor market", said in a statement CSFB.
Ifo business climate index in Germany fell in March to a minimum of five - from the February value of 95.4 - 96.4. The average forecast was - 95.7. The index of consumer confidence from the University of Michigan increased to 95.8 in March from 94.1.
"Ifo was slightly lower than expected, but I would not say that it is too disturbing for the euro," said director of the foreign exchange market from the "Nomura International" in London. "The market has become too bear" - Nomura had forecast that the index drop to 94.4.
Remarque Trichet
Expectations were lowered after the European Central Bank President Jean-Claude Trichet earlier this week said that the bank may lower its forecasts for growth in the euro, if consumer demand does not increase.
In addition to the increase in consumer spending in Japan, retail sales increased in February compared with January to 1.7%, according to the Ministry of Finance.
"Restoration of Japan extends to consumers," said currency strategist "Dresdner Kleinwort Wasserstein" in London, Sabrina Jacobs, which expects the yen to rise to 104 within three months.
Foreign investors last week bought a record number of shares after the Japanese growth in the fourth quarter reached its highest pace since 1990. Japanese shares have reached the maximum value this year.
Gross national product grew by 6.4% in the fourth quarter, compared with 4.1% in the U.S. and 1.2% in the euro area.
Bank of Japan
"Economic prospects for Japan's becoming more and more bright," said Akira Takey, which is an observer for the assets of approximately $ 9.2 billion in "FujiInvestment Management Co." in Tokyo. "There is a clear change in the estimates of Japan by foreign investors."
"The suggestion that Japan may sell its currency to protect exporters' earnings before the end of fiscal year March 31, may limit the growth of the currency," said currency strategist from "UBS Securities LLC" at Stamford Daniel Katzayv. "There is a possibility that the Bank of Japan intends to support the next stage in the movement to a level of 100 yen," he said. "The Bank of Japan - the only obstacle to ketomu intensity.
The central bank, ordered by the Ministry of Finance, sold 10.5 trillion. yen ($ 99.1 billion) over the past two months ended February 25. The Ministry will publish the March figures on Wednesday.
Forex Magazine
based on bloomberg.com
based on bloomberg.com
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