Yen drops to 2-year low against dollar



Reuters

Published — Thursday 27 December 2012

Last update 27 December 2012 2:25 am

| نسخة PDF Print News | A A

NEW YORK/TOKYO: The yen fell to a two-year low against the dollar yesterday after Japan swore in a new prime minister who has called for weakening the currency to stimulate inflation, while US stocks slipped in thin trading.
The dollar rose as high as 85.74 yen on trading platform EBS, the highest since September 2010, following the swearing-in of Shinzo Abe as premier and was last at 85.65. The euro rose as high as 113.40 yen, a 16-month high, up 1.4 percent. The euro was at $1.3223 against the dollar, up 0.3 percent.
Abe is calling for a mix of aggressive monetary policy easing and big fiscal spending to beat deflation and weaken the yen. He is pressuring the Bank of Japan to adopt a 2 percent inflation target that would auger for a weaker currency, threatening changes at the central bank if his wishes are not met.
"The election of Abe has had a galvanizing effect on the dollar/yen exchange rate and he has been able to accomplish more in two months of jawboning than the BoJ has... over the past several years," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
US shares were slightly lower in post-Christmas trading, picking up from losses on Monday, as Congress looks likely to fail to negotiate a deal to avoid the "fiscal cliff," a series of $ 600 billion in spending cuts and tax hikes that would slow the US economy sharply unless lawmakers take action.
US stocks have held in a tight range, recovering losses sustained just after the US election in November. The S&P 500 is still up about 13 percent on the year.
The Dow Jones Industrial Average dropped 53.68 points, or 0.41 percent, at 13,085.40. The Standard & Poor's 500 Index was down 9.13 points, or 0.64 percent, at 1,417.53. The Nasdaq Composite Index was down 27.69 points, or 0.92 percent, at 2,984.91.
Many markets remained closed following Christmas. European exchanges were largely shuttered, and Hong Kong and Australia were also closed. The MSCI All-World Index was down 0.15 percent on Wednesday.
Brent crude climbed above $110 per barrel yesterday, hitting a two-month high, with investors hoping for a last-minute deal to avoid a U.S. fiscal crisis. US crude futures gained $2.30, or 2.6 percent, to $90.91.
The weaker yen has bolstered hopes for better earnings from Japanese companies and underpinned the Nikkei, which has gained about 18 percent since mid-November, when the election was scheduled. The yen has lost nearly 8 percent against the dollar in the same period.
The Nikkei closed at a nine-month high yesterday, with a 1.5 percent gain.
Minutes of the BOJ's policy-setting meeting in November, released yesterday, showed that some board members said the central bank must act decisively, without ruling out any policy options, if the outlook for the economy and prices worsens further.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. Shanghai shares were flat, but stayed in positive territory on the year after a 2.5 percent jump on Tuesday erased 2012 losses. It is set for a first annual gain in three years.

What's happening around Saudi Arabia

JEDDAH: The Saudi man who carried out a suicide bombing at a mosque in Kuwait on Friday had no previous convictions for terrorism, the Interior Ministry said.The ministry, through its Twitter account, announced that Fahad Suleiman Al-Gabbaa was born...
JEDDAH: Eight million people visited the Grand Mosque in the first 10 days of Ramadan, a 49 percent increase from last year, the Haj and Umrah Directorate said recently.Salah Saqr, director of the directorate, said the transport plan was approved and...
JEDDAH: The government has installed 5,000 high-definition cameras on all floors and courtyards of the Grand Mosque to ensure security and crowd control.These cameras are monitored 24 hours a day by officers at a control center in Mina. They have to...
GENEVA: Saudi Arabia has welcomed the report of the International Fact Finding Commission on Israeli aggression in Gaza and has lauded its effort to prepare the report despite noncooperation from Israel which did not allow the committee to do its wor...
JEDDAH: Several Yemenis have praised the government for correcting their status quickly, which created no extra burden while fasting.Many who gathered in front of the Passport Department in Asir said everything was in place for them, a local newspape...
RIYADH: The $11.6 billion King Abdullah Financial District (KAFD) is already being admired for being a smart city but nobody can tell when it will be completed.“Being a smart city, everything is state-of-the-art. There is seamless Internet access and...
RIYADH: In a new move, the Ministry of Health will conduct drug tests on all drivers ferrying pilgrims between Makkah and Madinah during the Haj season.The decision was taken at a Haj preparatory meeting held on Sunday under the chairmanship of Imad...
JEDDAH: Motorbikes are among the most important means of transportation in Makkah during Ramadan because they are easy to use and cope easily with congestion in the central area next to the Grand Mosque. Despite the presence of public transportation,...
JEDDAH: A local man here runs a business started 150 years ago by his grandfather making sought-after Hijazi sweets for Eid and other festivals.Samer Jastaniah, 35, has three family shops making these products. “I am the grandson of the doyen of swee...
RIYADH: Saudi students have won six medals — a gold, a silver and four bronze — at the 19th Junior Balkan Mathematical Olympiad (JBMO 2015), securing the fifth place for the nation, as against 13th in its first participation in 2013.Rinad Abu-Jamal f...
Ambassador of Belgium Geert Criel:— Which particular aspect of Saudi Arabia you like the most? The friendliness of its people.— What is your favorite and oft-repeated Arabic word? Ahlan wa Sahlan.— Which book is by your bedside these days? World Orde...
AL-AHSA: Saudi farmers here need more support to buy fertilizers, medicines and equipment, and market their products.This is the view of Ahmed Al-Musalmi, who recently won the country’s ‘Ideal Farmer Award.’ He said high production costs and low mark...
JEDDAH: The Commission of the Promotion of Virtue and Prevention of Vice (Haia) has launched 20 initiatives aimed at improving the professionalism of employees and limiting individual interpretations and actions while carrying out duties.Sheikh Abdul...
RIYADH: Medical studies and research for new methods in the treatment of chronic diseases suggests that fasting could help combat cancer and boost effectiveness of treatment.Scientists doing research on the positive aspects of fasting discovered that...
RIYADH: The Ministry of Education has announced that Saudi universities would accept 95 percent of high school graduates, despite a royal decree four years ago setting a ceiling of 70 percent.The royal decree had approved the “Afaq Project,” a strate...

Stay Connected

Facebook