Sat, May 11, 2013 - Page 1 News List

Greenback soars past ¥100 mark, Japan stocks gain

AP and Bloomberg, TOKYO

Photographers take pictures of monitors displaying the Japanese yen’s exchange rate against the US dollar and Nikkei share average at a foreign exchange company in Tokyo yesterday.

Photo: Reuters

The US dollar yesterday soared above ¥100 for the first time in more than four years, driven by improved US economic figures and Tokyo’s aggressive credit-easing that aims to revive Japan’s sluggish economy. The US dollar rose as high as ¥101.18, the first time since April 2009 that the greenback has traded above ¥100. The move lifted Japanese stocks to their highest level in more than five years.

The weaker yen is a boon to Japan’s major auto and electronics exporters. The government said the yen’s fall signaled that Japanese Prime Minister Shinzo Abe’s policy mix of increased public spending and aggressive monetary easing, dubbed “Abenomics,” was proving successful.

“With Abenomics, we hope that the Japanese economy will grow and can contribute to the global economy,” Japanese chief Cabinet spokesman Yoshihide Suga said. “It’s better that stocks are high than low. We believe this is a sign that our policies are progressing well.”

Tokyo closed up 2.93 percent, or 416.06 points at 14,607.54. The benchmark Nikkei 225 index had earlier soared 3.09 percent in mid-morning trade. Its close was the best since Jan. 4, 2008, when it ended at 14,691.41.

Japan’s monetary easing and expectations it will help reverse persistent deflation have helped drive the value of the yen down by more than 20 percent against the US dollar since October, when it was trading at around ¥78.

The nation’s current-account surplus rose in March to the highest level in a year as a depreciating yen boosted repatriated earnings and brightened the outlook for the nation’s exports, the Japanese Ministry of Finance said yesterday.

The excess in the widest measure of trade was ¥1.25 trillion, the ministry said. That exceeded the ¥1.22 trillion median estimate of 23 economists surveyed by Bloomberg News.

The cost of a weaker yen is higher import costs, reflected in a ninth straight trade deficit in March. The current-account surplus was 4 percent lower than the same month last year and the income surplus widened to ¥1.7 trillion, the highest level since March 2010, the ministry said.

Sustaining a current-account surplus may help to maintain confidence in the nation’s finances as Abe wrestles with a debt burden more than twice the size of the economy.

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