The yen had the biggest weekly drop versus the US dollar in more than a year as economic reports added to signs central banks in Europe and the US are closer to raising interest rates as the global economy recovers.
Japan’s currency reached the weakest level since last September amid concern the nation’s economy will be hampered by the aftermath of the March 11 earthquake and tsunami, while US unemployment fell to a two-year low. Brazil’s real advanced the most in one-and-a-half years on speculation the government will allow the currency to strengthen as a counterweight to inflation.
The euro rose against the greenback and yen with the European Central Bank forecast to raise interest rates at its meeting on Thursday for the first time since July 2008.
“What we saw, as far as the yen was concerned, was the positive US report, increased interest-rate expectations,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co in New York.
The yen fell 3.4 percent against the US dollar to ¥84.06, from ¥81.34 on Friday last week and touched the weakest level since Sept. 24 last year. It was the biggest weekly decline since Dec. 4, 2009. The Japanese currency fell 4.4 percent versus the euro to ¥119.66, the most since the week ended Sept. 17 last year. The euro strengthened 1.1 percent against the greenback to US$1.4237.
The yen weakened against all its major counterparts this week, after strengthening to a post-World War II high of ¥76.25 on March 17.
Radiation levels that can prove fatal were detected outside reactor buildings at Japan’s Fukushima Dai-ichi nuclear power plant for the first time last week. Elevated radiation levels have been detected in crops grown near the stricken plant as well as the water supply in Tokyo, 220km to the south, and other regions.
“Fundamentals have shifted in Japan because, when this is said and done, Japan’s trade surplus will shrink dramatically or even turn in to a deficit” as the country focuses on rebuilding, said Greg Anderson, a currency strategist at Citigroup Inc in New York.
Brazil’s real had its biggest weekly gain one and one-half years. The nation imposed a 6 percent tax on international bond sales and loans, which Brazilian Minister of Finance Guido Mantega said was an attempt to stem the real’s 44 percent gain against the US dollar since the end of 2008.
The real was up 3.3 percent this week, the most since the period ended July 17, 2009.
ASIAN CURRENCIES
South Korea’s won led a second week of gains among Asian currencies as overseas investors poured funds into the region to benefit from higher interest rates compared with those in developed nations.
Taiwan’s central bank raised borrowing costs on Thursday, joining Thailand, South Korea, India, Indonesia and the Philippines in tightening policy this year to counter rising consumer prices. South Korea’s inflation rate climbed to 4.7 percent last month, the highest since October 2008, the statistics department reported yesterday. Benchmark interest rates in Indonesia and India are 6.75 percent and 5.75 percent, versus 1 percent in Europe and a maximum 0.25 percent in the US.
“Most central banks in Asia are still inclined to raise rates in the coming quarter,” said Christy Tan, a foreign-exchange strategist at Bank of America-Merrill Lynch in Singapore. “That’s supportive for Asian currencies.”
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies, advanced 0.6 percent this week to 117.61, the highest level since 1997. The won rose 2.1 percent over the week to 1,091.20 per US dollar. The New Taiwan dollar gained 0.7 percent to NT$29.320.
Funds based abroad plowed US$2.3 billion into equities in Taiwan, South Korea, Indonesia and Thailand this week as of Thursday, stock exchange data show.
“Global stocks, including South Korea’s, have been performing well on expectations for an economic improvement,” said Ha Jun Woo, a currency dealer at Daegu Bank in Seoul.
Malaysia’s ringgit climbed to the strongest level in more than 13 years after a central bank report on Thursday showed international investors raised holdings of local-currency debt to a record.
Malaysia’s “bond inflows suggest risk appetite among foreign investors is still strong,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ BHD in Kuala Lumpur. “The authorities are trying to stabilize the market but there is still room for the ringgit to appreciate.”
The ringgit was little changed at 3.0255 compared with 3.0235 a week ago. It reached 3.0190 yesterday, the strongest level since October 1997.
Elsewhere, China’s yuan gained 0.2 percent this week to 6.5479 per US dollar, Indonesia’s rupiah climbed 0.2 percent to 8,700, while Thailand’s baht was little changed at 30.28.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day