The yen logged its biggest weekly gain since February, sending volatility in the US$5.3 trillion-a-day currency market toward a four-year high.
Japan’s currency gained 2.2 percent or more versus all 16 major peers this week as the nation’s exporters repatriate earnings for the start of the new fiscal year and traders become emboldened by doubts the authorities will step in to limit the currency’s advance. The Bank of Japan’s surprise Jan. 29 decision to adopt negative interest rates has failed to rein in the currency’s 11 percent rally this year.
The looming vote on Britain’s membership in the EU also stoked speculation about potential losses in the continent’s currencies, while the US dollar was undermined as traders reduced bets on higher US interest rates.
“The rise in volatility is part of the uncertainty around the [US] Federal Reserve’s monetary policy, the ‘Brexit’ referendum and the Japanese authority’s approach to dealing with the yen’s appreciation,” said Peter Rosenstreich, head of market strategy at Swissquote Bank SA in Gland. “People are starting to question Abenomics and its limitations. The market is nervous because there’s not much of a direction or clarity.”
The yen advanced 0.1 percent to ¥108.07 per US dollar as of 5pm on Friday in New York, gaining for a sixth consecutive day. On Thursday, it reached ¥107.67, the strongest since before Japan unexpectedly boosted its monetary stimulus program on Oct. 31, 2014.
Japan’s currency slid 0.1 percent to ¥123.19 per euro, trimming this week’s advance to 3.3 percent.
The surging yen has fueled volatility and pressured currencies such as the Brazilian real, South African rand and Australian dollar, which are dependent on commodity prices and have been among the biggest losers this week.
There is speculation investors have withdrawn from so-called carry trades amid concern returns from higher-yielding assets will be wiped out by price swings, and as the yen — a cheap funding currency — appreciates.
In Taipei, the US dollar gained NT$0.048 to close at NT$32.450 on Friday. That was also higher compared with NT$32.378 the previous week.
The greenback opened higher against the NT dollar, bouncing back from a day earlier, and the momentum continued as traders kept buying into the US currency, taking cues from a move by the People’s Bank of China to lower the Chinese yuan’s reference rate against the greenback, dealers said.
The yen’s downturn from its recent strength also led traders in the region to dump most other regional currencies, including the NT dollar, they said.
Selling in the NT dollar was also seen throughout the session because of foreign institutional selling in the local equity market. According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$611 million worth of shares, the dealers said.
Meanwhile, the British pound looks unlikely to get much of a boost next week even as traders get the chance to turn their attention away from the vote on Britain’s EU membership and back toward the economy.
Economists expect data on Tuesday to show inflation quickened to 0.4 percent last month, the fastest pace in more than a year. However, that is still well below the Bank of England’s 2 percent target for annual consumer price growth, giving officials little encouragement to raise interest rates from a record-low 0.5 percent when they announce their policy decision two days later.
Waning prospects for a rate increase helped send the pound to the lowest in more than two years on a trade-weighted basis this week, and saw it sink to the weakest since June 2014 versus the euro.
The pound dropped 0.8 percent this week to US$1.4107 as of pm in London on Friday. It slipped 1 percent to £0.8087 per euro, a fifth consecutive weekly decline, and on Thursday sank as low £0.8117.
Sterling fell against 11 of its 16 major peers this week, and risk reversals derived from options suggest it will drop against all but one in the next three months.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last