Traders anxiously await an indication of whether Japan will intervene to halt the surging Yen, and the decline of the greenback.
Bloomberg: Contracts granting the right to buy the yen versus the dollar rose last week to a 2.1 percentage-point premium relative to options for selling Japan’s currency, according to Bloomberg data. The odds of the yen strengthening past 84.83 per dollar, the highest since July 1995, to 84.5 by the end of March rose to 80 per cent, options data compiled by Bloomberg show.
Finance Minister Hirohisa Fujii said on Nov. 27 in Tokyo his nation will “do what is necessary” and he may contact U.S. and European officials to act, raising speculation that officials will intervene in foreign-exchange markets for the first time since 2004. The yen’s 14 per cent advance against the dollar since April 6 threatens profits at exporters from Sony Corp. to Toyota Motor Corp.
However the latest word is that an intervention is a no-go:
Dow Jones: Japanese Finance Minister Hirohisa Fujii ruled out currency intervention for the time being, saying it is “unthinkable” right now, Japanese daily Mainichi Shimbun reported in its Monday morning edition.
“(We’re) now at the stage of monitoring the (currency market) situations and (intervention) is unthinkable,” Fujii was quoted as saying by the Mainichi.
The paper said Fujii made the remark to a group of reporters after he attended an unscheduled meeting of Prime Minister Yukio Hatoyama and his senior economy-related ministers.
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