The yen gained versus the US dollar, headed for its biggest monthly rally since July last year, as investors speculated the US Federal Reserve will not be quick to abandon efforts to support the US economy.
The euro fell versus most major peers this week after Standard & Poor’s downgraded Spain, fueling bets Europe’s debt crisis is spreading. The yen also rose amid concern new Bank of Japan (BOJ) stimulus will not be enough to spur growth. The greenback dropped as 10-year US Treasury yields slid for a sixth week, damping the appeal of US debt over Japanese bonds. US jobs growth remained below 200,000 in April, data next week may show.
“To a surprising degree, the yen has been very much correlated with US yields,” Steven Englander, head of G10 currency strategy at Citigroup Inc in New York, said on Friday. “There was also a bit of disappointment in the Bank of Japan.”
The yen strengthened 1.6 percent to ¥80.27 per US dollar on Friday in New York, from ¥81.52 a week earlier. It reached ¥80.22, the strongest level since Feb. 28. The Japanese currency has gained 3.2 percent this month, the most since a 5 percent rise in July last year. The yen advanced 1.3 percent to ¥106.40 per euro. The 17-nation currency rose 0.3 percent to US$1.3255.
The BOJ said on Thursday it would boost its asset-purchase fund to ¥40 trillion (US$498 billion) by June next year, compared with the previous target of ¥30 trillion by year-end. A separate central-bank program providing funds to banks was pared by ¥5 trillion amid lackluster demand for loans. Economists had expected an increase of as much ¥10 trillion to the nation’s stimulus program.
The central bank’s move “was fairly disappointing, so the temptation to sell the yen was weakened,” Sebastien Galy, a foreign-exchange strategist at Societe Generale SA in New York said on Friday.
The Dollar Index fell for a second week as the Fed repeated a plan to keep its key interest rate “exceptionally low” through at least late 2014 and a government report showed the US economy expanded in the first quarter less than forecast.
US GDP grew at a 2.2 percent annual rate, US Department of Commerce data showed on Friday.
ASIAN CURRENCIES
Asian currencies had a weekly gain, led by Malaysia’s ringgit, as upbeat US economic data brightened the outlook for regional exports and prompted investors to favor riskier assets.
South Korea’s GDP increased in the first quarter at the fastest pace in a year and the nation’s current-account surplus reached a four-month high last month, central bank reports showed on Thursday and Friday.
The ringgit strengthened 1.1 percent this week to 3.0315 versus the US dollar in Kuala Lumpur, its best performance in three months. The New Taiwan dollar advanced 0.6 percent to NT$29.332 and South Korea’s won appreciated 0.4 percent to 1,135.10. India’s rupee weakened 0.9 percent to 52.5425, as Standard & Poor’s lowered the outlook on its credit rating for the nation.
“It looks like the US economy is recovering; that boosts optimism in the market,” said Samson Tu (涂韶鈺), a Taipei-based fund manager at Uni-President Assets Management Corp (統一投信). “The flows into emerging sovereign bonds have been very active lately.”
Asia’s currency gains were limited by concern Europe’s debt crisis is worsening.
The won completed its biggest weekly gain in nearly two months as data showed on Friday that the current-account surplus was US$3 billion last month, up from US$557 million in February. GDP rose 0.9 percent in the first quarter from the previous quarter, according to figures released on Thursday.
The ringgit rose for a fourth day on Friday, its longest winning streak in 12 weeks. Malaysia’s exports increased 15 percent from a year earlier in February.
“US employment and housing are gradually improving so spending is on the rise and we expect Malaysian exports to pick up,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ BHD in Kuala Lumpur.
Elsewhere, the Philippine peso climbed 0.6 percent this week to 42.368 per US dollar, Thailand’s baht advanced 0.4 percent to 30.77 and China’s yuan was little changed at 6.3102. Indonesia’s rupiah was little changed at 9,185 and Vietnam’s dong dropped 0.3 percent to 20,890.
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],”
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
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained