The US government has made a "major change" in its foreign-exchange policy that will keep the greenback in a range of between ¥100 and ¥110, said Eisuke Sakakibara, Japan’s former top currency policy official.
“It was a major change in US foreign-exchange policy,” Sakakibara said in an interview with Bloomberg Television yesterday in Tokyo. “There has been a shift of their position because of inflation. They are now talking about intervention.”
US Treasury Secretary Henry Paulson said this month he would “never take intervention off the table” and Federal Reserve Governor Ben Bernanke said he was “attentive” to the dollar’s slump.
Group of Eight officials said at a summit over the weekend that a stronger US currency would help curb oil prices and inflation.
Sakakibara, who correctly forecast in an interview in October that the dollar would plunge, said in March that a US recession could push the yen as high as ¥80 or ¥90 in the next two years.
A professor at Waseda University in Tokyo, Sakakibara was dubbed “Mr Yen” due to his ability to influence the foreign-exchange market during his 1997-1999 tenure at the finance ministry.
Sakakibara said there was a “very small” chance that Japan would agree to joint intervention to limit the euro’s gains against the yen. He said it was unlikely policymakers would buy dollars with yen.
The yen fell to ¥108.40, the lowest level since Feb. 14, before trading at ¥108.24 at 11:25am in Tokyo from ¥108.19 late in New York on Friday. Japan’s currency declined to ¥166.74 against the euro from ¥166.35. The dollar traded at US$1.5405 per euro from US$1.5380. It earlier fell to US$1.5450 per euro.
“A strong dollar is in our nation’s interest,” Paulson told reporters after the G-8 meeting. French Finance Minister Christine Lagarde said she was “happy to hear Paulson clearly say how much the strong dollar policy is indispensable.” Canadian Finance Minister Jim Flaherty and Russian Finance Minister Alexei Kudrin said a stronger dollar would reduce oil prices.
The world economy faces “headwinds” from rising fuel and food costs, G-8 ministers said in Osaka, Japan, in a statement on Saturday that didn’t mention foreign exchange.
“The world economy continues to face uncertainty and downside risks persist,” G-8 officials said in a statement. “Elevated commodity prices, especially of oil and food, pose a serious challenge.”
The G-8, which includes the US, Japan, Russia, Germany, France, the UK, Italy and Canada, stuck to its practice of not making a joint comment on currencies when central bankers are absent.
The price of oil reached an unprecedented US$139.12 a barrel last week and food costs from rice to soybeans have risen to record highs this year.
The dollar has fallen against 11 of the 16 most active currencies this year as oil rose to a record. The US currency’s correlation with oil prices against the euro was minus 0.93 for the past year, according to Bloomberg calculations based on value changes. This means the two move in the opposite direction 93 percent of the time.
Sakakibara is on the Asia-Pacific advisory board of Bloomberg LP, parent of Bloomberg News.
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
The government yesterday approved applications by Alphabet Inc’s Google to invest NT$27.08 billion (US$859.98 million) in Taiwan, the Ministry of Economic Affairs said in a statement. The Department of Investment Review approved two investments proposed by Google, with much of the funds to be used for data processing and electronic information supply services, as well as inventory procurement businesses in the semiconductor field, the ministry said. It marks the second consecutive year that Google has applied to increase its investment in Taiwan. Google plans to infuse NT$25.34 billion into Charter Investments Ltd (特許投資顧問) through its Singapore-based subsidiary Fructan Holdings Singapore Pte Ltd, and
Micron Technology Inc is a driving force pushing the US Congress to pass legislation that would put new export restrictions on equipment its Chinese competitors use to make their chips, according to people familiar with the matter. A US House of Representatives panel yesterday was to vote on the “MATCH Act,” a bill designed to close gaps in restrictions on chipmaking equipment. It would also pressure foreign companies that sell equipment to Chinese chipmaking facilities to align with export curbs on US companies like Lam Research Corp and Applied Materials Inc. The bill targets facilities operated by China’s ChangXin Memory Technologies Inc
Singapore-based ride-hailing and delivery giant Grab Holdings’ planned acquisition of Foodpanda’s Taiwan operations has yet to enter the formal review stage, as regulators await supplementary documents, the Fair Trade Commission (FTC) said yesterday. Acting FTC Chairman Chen Chih-min (陳志民) told the legislature’s Economics Committee that although Grab submitted its application on March 27, the case has not been officially accepted because required materials remain incomplete. Once the filing is finalized, the FTC would launch a formal probe into the deal, focusing on issues such as cross-shareholding and potential restrictions on market competition, Chen told lawmakers. Grab last month announced that it would acquire
RSS