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The foreign exchange market is notorious to force the envelope. It is expected they will continue to buy yen to press Japanese authorities to intervene. The next level is 80 against the dollar and 100 against the Euro for speculators to aim for. Prime Minister Naoto Kan also voiced his concerns fully aware of Japan’s reliance on the Yen for exports. The Yen has been on a tear since the U.S. announced jobless claims of 500,000 last week. In 2010 the Yen has gained almost ten percent.

The most likely official Japanese measures would be further monetary easing though that is limited also given Japan’s low rates. The next Bank of Japan's scheduled meeting is Sept. 6-7. However if the Nikkei Dow continues to slide with a strong yen they may act before.]]> billyaustindillon@nospam.com (billyaustindill) Tue, 24 Aug 2010 04:48:44 -0700 http://traderscommunity.com/news.php?item.34784.2 http://traderscommunity.com/news.php?item.34763.2
If it does do anything to help the Japanese economy and it’s fragile recovery from the rising yen it would be to ease monetary policy. Currently the yen sits near an all time high against the U.S. dollar. Japan’s economy is reliant on exports so a rising yen threatens export growth. Given that Japan’s biggest trading partner is China these days a steady rising yen will comfort Bank of Japan monetary policy to remain steady.

The BOJ will have its eyes focused on any more Quantitative easing by the U.S. Federal Reserve. This would serve to further pressure is ready to act if expectations of further monetary easing by the dollar yen rate lower. A straight drop of between 3-4 yen in a single trading day drop would be what would make the Bank of Japan monetary policy responses towards further easing. It would be very highly unlikely at this time that Japan would resort to quantitative easing.

Bank of Japan Monetary Policy Responses

]]> billyaustindillon@nospam.com (billyaustindill) Thu, 05 Aug 2010 02:00:07 -0700 http://traderscommunity.com/news.php?item.34763.2 http://traderscommunity.com/news.php?item.34749.2
Concerns about Japan’s economic recovery continue given Japan’s dependence on export growth. Export growth is expected to stall in the fourth quarter due to the high Yen. The high yen impacts export competitiveness. Government stimulus measures are also set to end in Q4.

Kamezaki did sound out euro weakness against the yen as a potential threat to the economy. Dollar yen is currently around 88.00 yen. Euro Yen is around 114 yen. A fall below 85 yen would put added pressure on export pricing. The BOJ is limited in being able to cut short-term interest rates lower. Any intervention is likely to be verbal intervention. It is important to note the Ministry of Finance is responsible for deciding currency policy and forex intervention. The BOJ facilitates the trades.]]> melanie@nospam.com (traders) Wed, 28 Jul 2010 05:13:26 -0700 http://traderscommunity.com/news.php?item.34749.2 http://traderscommunity.com/news.php?item.34736.2
* Today the Aussie is steady at $0.9036 but still under pressure as investor appetite for risk and higher-yielding currencies took a beating last week from concerns ranging from Chinese policy tightening to Greek fiscal woes and sliding U.S. bank shares. Aussie offshore trading range $0.8995-0.9039.

* Aussie also stuck at 81.64 yen after hitting a one-month low last week as the Japanese currency benefited from its safe haven status. It dropped to as low as 80.76 yen, more than 5 yen lower than a recent peak of 85.75 yen.

* The S&P 500 dropped 2.21 percent while the Dow fell 2.09 percent, keeping U.S. 10-year yields down at 3.60 percent.

* Local bonds followed with three-year bond futures indicated up 0.030 points at 95.010, while the ten-year contract gained 0.005 points to 94.505.]]> melanie@nospam.com (traders) Sun, 24 Jan 2010 16:28:02 -0800 http://traderscommunity.com/news.php?item.34736.2 http://traderscommunity.com/news.php?item.34707.2
In terms of the direct impact on the EUR, concerns about the seriousness and / or ability of Greece to solve its problems are also weighing on the currency. The Ecofin meeting of European finance ministers this week inspired little confidence about the fate of the country. Officials noted that Greece would not receive help from its neighbours but said its problems are a concern for all of the eurozone. Officials urged Greece to take the necessary steps to reduce its burgeoning budget. In particular, officials called on Greece to detail "concrete" measures to achieve planned reforms.

The strength of the EUR was also discussed at the Ecofin meeting, with the EU's Juncker stating that it should better represent European interests. The EUR is clearly overvalued and will act as yet another constraint to eurozone recovery so such concerns should be taken at face value but there is little that will likely be done about it. Intervention is certainly not much of a prospect at current levels.]]> melanie@nospam.com (traders) Wed, 20 Jan 2010 04:41:37 -0800 http://traderscommunity.com/news.php?item.34707.2 http://traderscommunity.com/news.php?item.34708.2
The dollar index (DXY) traded at 78.074 up from 77.451 in late North American trading Tuesday. The index tracks the dollar against a trade-weighted basket of six major rivals.
The euro traded at $1.4143 versus the dollar, down from $1.4301 late Tuesday, falling to its lowest level since mid-August.

A report in the state-run China Securities Journal, citing several unnamed sources, said the China Banking Regulatory Commission asked several commercial banks to stop issuing new loans in the remaining days of January.

China's top banking regulator Liu Mingkang denied the report, but said Chinese banks were expected to issue about 7.5 trillion yuan ($1.1 trillion) in new loans in 2010 compared to 9.59 trillion yuan in 2009, reflecting efforts to rein in bank lending which nearly doubled last year.]]> melanie@nospam.com (traders) Wed, 20 Jan 2010 03:25:05 -0800 http://traderscommunity.com/news.php?item.34708.2 http://traderscommunity.com/news.php?item.34689.2
* Weak euro recovered some ground against Aussie to A$1.5541 , after falling as low as A$1.5495 offshore on Monday.

* Euro threatening to breach major support in the A$1.5470-A$1.5490 range, lows from 2005 and 2007. A break would be technically very bullish for the Aussie.

* Euro is pressured by festering concerns over Greece's ballooning fiscal deficit and its ability to repay outstanding debt.

* Investors are worried the European Union will not save Greece if it defaults, which would in turn raise questions about the group's viability. Euro ministers offered some cautious support for Greece on Monday.
]]> melanie@nospam.com (traders) Mon, 18 Jan 2010 19:44:02 -0800 http://traderscommunity.com/news.php?item.34689.2 http://traderscommunity.com/news.php?item.34677.2
The ECB said in a statement that seven-day Swiss franc swap operations, which began in October 2008, would not continue past the end of January.

'This decision was made against the background of declining demand and improved conditions in the funding markets,' it said in a statement.

Last week's operation attracted bids of just 1.6 billion euros, and traders and economists had not expected the operations would be renewed past the expiry date of end-January.

The ECB has phased back its foreign currency liquidity operations in recent months and in December started to unwind the extra lending in euros which has flooded markets with liquidity and pushed market lending rates to record lows.]]> melanie@nospam.com (traders) Mon, 18 Jan 2010 01:25:04 -0800 http://traderscommunity.com/news.php?item.34677.2 http://traderscommunity.com/news.php?item.34676.2
The SNB said in a statement that the last swap operation, providing Swiss francs against euros, would be conducted on Jan. 25.

'Demand for liquidity provided by this type of operation has declined, and conditions in the Swiss franc funding market have improved,' the SNB said.

'Banks domiciled in Switzerland and abroad continue to have access to Swiss franc liquidity via the Swiss franc repo system and the interbank market.']]> melanie@nospam.com (traders) Mon, 18 Jan 2010 01:23:20 -0800 http://traderscommunity.com/news.php?item.34676.2