Friday, February 22, 2013

Dollar drifts lower below ¥93.40 | The Japan Times

The dollar eased slightly below ¥93.40 in Tokyo on Wednesday after Prime Minister Shinzo Abe has grown cautious about proposed purchases of foreign bonds.

At 5 p.m., the dollar was quoted at ¥93.35-36, down from ¥93.46-46 at the same time Tuesday. The euro stood at $1.3408-3409, up from $1.3336-3340, and at ¥125.16-19, up from ¥124.62-65.

Speaking before the Upper House Budget Committee in the afternoon, Abe said it has become “almost unnecessary” to set up a proposed public-private fund to buy foreign bonds.

“Even though the dollar stays on an uptrend against the yen, it may experience deeper adjustments if it comes under sales repeatedly on remarks deemed negative by market players,” an official at a major Japanese bank said.

Early in the morning, the greenback rose to around ¥93.80 on purchases to take advantage of anticipated strong demand for dollars for commercial settlements, traders said.

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Comment: Make no mistake about it, this is not a case where the dollar is "strong" against the Yen. What we are witnessing here is a case of economic Seppuku. The situation was a case where the Yen was hanging onto the cliff-face by its fingernails and instead of offering it a hand up, Abe just trimmed them with a nail clippers. It looks as though the race to the bottom between the Yen, the Euro and the dollar will be won by the Japanese. Not to worry, die is cast and eventually the other currencies will crash and burn too.

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