The yen fell for a third day against the dollar after Zembei Mizoguchi, vice finance minister for international affairs, said Japan may sell the yen in a "massive" way to avoid "rapid" movements.
The yen fell to Japanese yen 120.29 to the dollar at 3:27pm in Tokyo yesterday, from Japanese yen 119.87 in New York late Friday, when a senior Ministry of Finance official said Japan sold yen for dollars several times during the last half of January. It pared some of its losses after Prime Minister Junichiro Koizumi denied a Kyodo News report that Nobuyuki Nakahara, who favors pumping more money into the economy, will be the next Bank of Japan governor.
"There could be massive" yen-selling from now, Mizoguchi said. Japan's selling of Japanese yen 700 billion (US$5.84 billion) in January, was "preemptive, to make the market stable," he said.
The yen has risen about 12 percent in the past year, eroding earnings of exporters such as Canon Inc, which earns three- quarters of its revenue abroad.
The Ministry of Finance "has made it clear it doesn't want the yen to weaken," said Masahiro Fukuhara, who helps manage currency risk at Barclays Global Investors, which has about US$700 billion under management.
January's action was the first time Japan sold its currency since June 28, when it finished spending Japanese yen 4 trillion over seven days to prevent its rise. Last year, Japanese authorities announced their actions each time.
"This unannounced action to sell the yen seems to be a change of strategy by the ministry and that makes everyone nervous," said Motoshi Imura, foreign exchange manager at Bank of Tokyo-Mitsubishi Ltd The yen could fall to Japanese yen 122 against the dollar in the next couple of weeks, he said.
The yen fell as low at Japanese yen 120.91 to the dollar on Kyodo's report, citing unnamed senior officials of the ruling Liberal Democratic Party, before Koizumi called it "incorrect."
Nakahara has advocated an inflation target to fight almost five years of falling prices and has urged the central bank to print more money and buy foreign bonds to increase the money supply. Masaru Hayami's term as head of the central bank ends March 19.
"The Kyodo report sent the yen tumbling and Koizumi's denial just sent it back up," said Minoru Shioiri, foreign exchange manager at Mitsubishi Securities.
The euro fell against the dollar to US$1.0737 from US$1.0771 late Friday on expectations European manufacturing probably contracted for a fifth month amid concern over a sputtering economy. The 12-nation European currency has risen about 7.5 percent against the dollar in the past three months, making it harder for European exporters to sell their products abroad, as the threat of a US-led war in Iraq prompted investors to keep their money out of the US.
An index based on a survey of purchasing managers at 2,500 companies for Reuters Group Plc probably rose to 48.7 last month, according to the median forecast of 18 economists surveyed by Bloomberg News, from 48.4 in December. A level below 50 indicates a contraction.
"The euro's rise over the past few months has had nothing to do with the European economy, which is looking pretty bad," said Hiroshi Sakuma, associate director of foreign exchange in Tokyo at Barclays Bank Plc. "The report today should reinforce that, sending the euro down."
Under an inflation target, which Hayami has opposed, the Bank of Japan would set a goal for an increase in prices in a specified period of time and pump money into the economy until the goal is met.
Nakahara's appointment to head the central bank "would be extremely negative for the yen," said Marshall Gittler, foreign exchange strategist in Tokyo at Deutsche Bank AG, the third-largest trader in the US$1.2-trillion-a-day currency market.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
RSS