Wednesday, July 13, 2011

Yen Weakens Return Of The Highest Level 4 Month Related Japanese Government Intervention

Yen back down from its highest level since the Japanese government intervened in the foreign exchange markets amid speculation that Japan will sell its currency to support exporters.

Reached 78.50 yen per dollar today, the strongest since March 17 associated concerns of Europe's debt crisis spreads that drive demand for the yen as an alternative investment.

Then the yen fell to 79.38 per dollar at 10:51 am in Tokyo from 79.24 in New York yesterday. Down 110.96 per euro from 110.74 yesterday, when it reached 109.58, highest since March 17.

Yen tends to strengthen during the economic and financial turmoil since the Japanese trade surplus makes it less dependent on foreign capital.

G-7 to sell the Japanese currency in the exchange market on March 18, after the yen hit a record 76.25 per dollar, threatening the recovery after the earthquake and tsunami of March 11. It became the first intervention in more than a decade.

Japan is the third largest economic power in the world, fell by 3.5% annual pace in the three months to March, the second quarterly contraction due to spending and investment slump after the earthquake.

Borthwick predict Japan will be required to sell the yen when the currency rose about 1% more against the Chinese yuan and 5% against the South Korean won.

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