The yen will keep weakening in the next few months, possibly falling beyond ￥90 to the US dollar, Japan’s former currency czar, Eisuke Sakakibara, said yesterday, while a former senior Bank of Japan (BOJ) official also forecast the yen’s decline.
The two former officials weighed into an intensifying debate in financial markets whether the yen was poised for a lasting reversal of its rising trend and a longer spell of weakness. Expectations that the BOJ may further ease its ultra-loose policy at a time when US and eurozone central banks move closer to lifting interest rates have spurred talk about a return of a yen carry trade, where a low-yielding yen is used to fund investments in higher-yielding assets.
“I would not be surprised if the dollar/yen exceeds 90,” said Sakakibara, who was known as Mr Yen in the 1990s as he spearheaded Japan’s intervention to stem the yen’s rise when he served as vice minister for international affairs at the Ministry of Finance.
The yen’s depreciation is likely to continue in the coming three to six months, Sakakibara told foreign correspondents in Tokyo.
Separately, Eiji Hirano, former BOJ executive director, said the yen was likely to weaken medium to long term as the BOJ maintains its ultra-loose monetary policy.
However, if the yen spikes up sharply again, G7 nations will likely step into the currency market again, Hirano said in an interview.
The yen was trading around 84 to the dollar yesterday, well below its all-time high of 76.25 hit days after the March 11 devastating earthquake and which triggered a rare G7 intervention.
“The yen’s move just after the quake was a perfect case for concerted intervention,” Hirano said.
“The markets are still unstable. In the event of severe market turmoil, the G7 nations may jointly intervene again,” he said.
At its meeting tomorrow and on Thursday, the bank is expected to discuss launching a credit line to financial institutions in the quake-affected areas. It may also consider further monetary easing to help the economy cope with the aftermath of the earthquake and tsunami that devastated coastal areas in Japan’s northeast and triggered the world’s worst atomic crisis in 25 years.
This is likely to weigh on the yen, making it more attractive carry trade funding currency than the US dollar.
RECORD BUDGET: TSMC does plan to raise its proposed capital expenditure a lot, and could benefit if Intel outsources more of its production to foundries, analysts said Intel Corp’s earnings conference call on Thursday is expected to clarify the US semiconductor giant’s outsourcing production plans, which would be crucial regarding Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) performance, analysts said. “TSMC stands to benefit if Intel outsources more of its fabrication to foundries,” SinoPac Securities Investment Service Corp (永豐投顧) analysts said in a note on Friday. Yuanta Securities Investment Consulting Co (元大投顧) was more cautious, saying that Intel’s contribution initially would be limited, but its outsourcing plans would still highlight TSMC’s leadership in technology, it added. “Intel will continue to manufacture server or high-end central processing units [CPUs], which have higher
Norway’s oil and gas reserves have made it one of the world’s wealthiest countries, but its dreams for deep-sea discovery now center on something different. This time, Oslo is looking for a leading role in mining copper, zinc and other metals found on the seabed and in hot demand in green technologies. The country could license companies for deep-sea mining as early as 2023, the Norwegian Ministry of Petroleum and Energy said, potentially placing it among the first countries to harvest seabed metals for electric vehicle batteries, wind turbines and solar farms. However, that could also place it on the front line of
‘BROAD RANGE’: The US Department of Commerce intends to deny a significant number of license requests for exports to Huawei, an industry association said US President Donald Trump’s administration notified Huawei Technologies Co (華為) suppliers, including chipmaker Intel Corp, that it is revoking certain licenses to sell to the Chinese company and intends to reject dozens of other applications to supply the telecommunications firm, people familiar with the matter told reporters. The action — likely the last against Huawei under Trump — is the latest in a long-running effort to weaken the world’s largest telecommunications equipment maker, which Washington sees as a national security threat. The notices came amid a flurry of US efforts against China in the final days of Trump’s administration. US president-elect Joe
MOBILE SMART: The Dimensity 1200 is 22 percent better in terms of performance than its predecessor, and 25 percent more power-efficient, the handset chip designer said MediaTek Inc (聯發科) yesterday unveiled its premium 5G processors — the Dimensity 1200 and Dimensity 1100 — as it vies for a larger slice of the world’s rapidly growing 5G smartphone market. Manufactured using Taiwan Semiconductor Manufacturing Co’s (台積電) 6-nanometer process technology, the Dimensity 1200 processor performs 22 percent better than the previous generation Dimensity 1000+ processor, and is 25 percent more power-efficient, MediaTek said. Chinese smartphone brands Xiaomi Corp (小米) and Realme Mobile Telecommunications (Shenzhen) Co (銳爾覓移動通信) are to be the first adopters of the latest Dimensity chips, the companies said during a virtual media briefing. Xiaomi plans to equip its first
RSS