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Yen Rises on Strongest Foreign Demand for Japan Assets in 2005 Dec. 8 (Bloomberg) -- The yen climbed against the dollar and euro after a government report showed overseas investor demand for Japan's bonds and stocks was the highest this year.
The figures helped the yen strengthen today against all the other 16 most-traded currencies tracked by Bloomberg. Demand for the yen also increased after Bank of Japan Governor Toshihiko Fukui said an end to the central bank's deflation-fighting policy is ``close,'' and consumer prices will show solid gains in the first quarter. The Nikkei 225 Stock Average rose to a five-year high this week.
``Foreign investors are in a hurry to buy Japanese assets such as stocks,'' said Xinyi Lu, chief strategist in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second-largest lender. ``That's clearly yen supportive.''
The yen strengthened to 120.67 against the dollar at 7:06 a.m. in London, from 121.03 late yesterday in New York, according to electronic foreign-exchange dealing system EBS. Against the euro, the yen advanced to 141.44 from 141.92 yesterday. The euro held at $1.1723 versus the dollar.
Japan's currency will move between 119 yen and 122 yen per dollar this month, Lu said.
Foreign investors bought a net 1.648 trillion yen ($13.65 billion) of Japanese securities during the week ended Dec. 3, the highest since the Ministry of Finance changed the way it calculates the figure in January.
`End is Close'
Japan's central bank has kept its so-called ``quantitative easing policy'' of pumping cash into the economy and holding rates at almost zero percent for 4 1/2 years as it struggles to overcome deflation, which erodes corporate profits and discourages spending.
``Consumer prices excluding fresh food became zero in October, and it is clear to everyone that the end is close,'' Fukui said at a business-executive meeting in Nagoya, Japan.
Interest rates will probably remain ``very low'' even after the quantitative-easing policy has ended, he said.
``Fukui's comments could be used as an excuse to buy the yen,'' said Gen Kawabe, a foreign-exchange manager in Tokyo at Chuo Mitsui Trust and Banking Co. Ltd. ``Markets have priced in that the so-called quantitative easing policy will end by next spring, and are very fixated on when the BOJ will raise interest rates from zero.''
The yen will move between 141 and 142 against the euro and between 120.50 and 121.30 versus the dollar today, Kawabe said.
The dollar may strengthen on speculation a report tomorrow will show consumer confidence gained this month, supporting the view the Federal Reserve next week will raise borrowing costs.
`More Room'
Fed policy makers have raised their target rate 12 times since June last year, to 4 percent, and will do so again on Dec. 13, according to economists surveyed by Bloomberg. The central bank will probably lift the rate to 4.50 percent at its Jan. 31 meeting, interest-rate futures show.
``There's more room for the dollar to rise as the rate- differential story works steadily,'' said Takehiko Jimbo, a currency manager at Mitsubishi UFJ Trust & Banking Co., a unit of the world's biggest lender by assets. ``Should the confidence report have a strong showing, that would reinforce the prospects for further rate hikes in the U.S.''
The dollar may trade between 120.70 yen and 121.50 yen today, Jimbo said.
The University of Michigan's index of consumer sentiment probably rose to 85 this month, the highest since August, from 81.6 in November, according to the median forecast of 51 economists surveyed by Bloomberg News.
The extra yield that U.S. 10-year notes offer over similar maturity Japanese bonds is about 2.98 percentage points today. The average for the past year is 2.89 points. The gap has widened from this year's low of 2.62 percentage points on Feb. 9.
`Pouring Money'
Gains in the yen may accelerate after a report showed Japan's machinery orders grew in October.
Private machinery orders excluding shipping and utilities rose a seasonally adjusted 4.8 percent in October, compared with a 10 percent drop in September, the Cabinet Office said. A 6 percent increase was expected, according to the median forecast of economists surveyed by Bloomberg News.
``More foreign investors such as hedge funds are pouring money into Japan,'' said Yuji Saito, a currency sales dealer at Societe Generale Bank in Tokyo. ``This move keeps the yen's unilateral decline under control, amid already dollar bullish sentiment.''
Against the yen, the New Zealand dollar dropped the most among the 16 most-actively traded currencies after Reserve Bank Governor Alan Bollard said the currency's level was `unjustified.'' He today raised interest rates for a ninth time since January 2004.
The yen has dropped almost 13 percent against the New Zealand dollar this year as the rate gap widened. Japan's currency gained about 0.9 percent against New Zealand's today.
``The New Zealand dollar's sharp decline triggered yen buying,'' said Tohru Sasaki, a currency strategist in Tokyo at JPMorgan Chase & Co. and a former Bank of Japan chief currency trader.
To contact the reporter on this story:
Keiko Ujikane in Tokyo at [email protected]
The figures helped the yen strengthen today against all the other 16 most-traded currencies tracked by Bloomberg. Demand for the yen also increased after Bank of Japan Governor Toshihiko Fukui said an end to the central bank's deflation-fighting policy is ``close,'' and consumer prices will show solid gains in the first quarter. The Nikkei 225 Stock Average rose to a five-year high this week.
``Foreign investors are in a hurry to buy Japanese assets such as stocks,'' said Xinyi Lu, chief strategist in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second-largest lender. ``That's clearly yen supportive.''
The yen strengthened to 120.67 against the dollar at 7:06 a.m. in London, from 121.03 late yesterday in New York, according to electronic foreign-exchange dealing system EBS. Against the euro, the yen advanced to 141.44 from 141.92 yesterday. The euro held at $1.1723 versus the dollar.
Japan's currency will move between 119 yen and 122 yen per dollar this month, Lu said.
Foreign investors bought a net 1.648 trillion yen ($13.65 billion) of Japanese securities during the week ended Dec. 3, the highest since the Ministry of Finance changed the way it calculates the figure in January.
`End is Close'
Japan's central bank has kept its so-called ``quantitative easing policy'' of pumping cash into the economy and holding rates at almost zero percent for 4 1/2 years as it struggles to overcome deflation, which erodes corporate profits and discourages spending.
``Consumer prices excluding fresh food became zero in October, and it is clear to everyone that the end is close,'' Fukui said at a business-executive meeting in Nagoya, Japan.
Interest rates will probably remain ``very low'' even after the quantitative-easing policy has ended, he said.
``Fukui's comments could be used as an excuse to buy the yen,'' said Gen Kawabe, a foreign-exchange manager in Tokyo at Chuo Mitsui Trust and Banking Co. Ltd. ``Markets have priced in that the so-called quantitative easing policy will end by next spring, and are very fixated on when the BOJ will raise interest rates from zero.''
The yen will move between 141 and 142 against the euro and between 120.50 and 121.30 versus the dollar today, Kawabe said.
The dollar may strengthen on speculation a report tomorrow will show consumer confidence gained this month, supporting the view the Federal Reserve next week will raise borrowing costs.
`More Room'
Fed policy makers have raised their target rate 12 times since June last year, to 4 percent, and will do so again on Dec. 13, according to economists surveyed by Bloomberg. The central bank will probably lift the rate to 4.50 percent at its Jan. 31 meeting, interest-rate futures show.
``There's more room for the dollar to rise as the rate- differential story works steadily,'' said Takehiko Jimbo, a currency manager at Mitsubishi UFJ Trust & Banking Co., a unit of the world's biggest lender by assets. ``Should the confidence report have a strong showing, that would reinforce the prospects for further rate hikes in the U.S.''
The dollar may trade between 120.70 yen and 121.50 yen today, Jimbo said.
The University of Michigan's index of consumer sentiment probably rose to 85 this month, the highest since August, from 81.6 in November, according to the median forecast of 51 economists surveyed by Bloomberg News.
The extra yield that U.S. 10-year notes offer over similar maturity Japanese bonds is about 2.98 percentage points today. The average for the past year is 2.89 points. The gap has widened from this year's low of 2.62 percentage points on Feb. 9.
`Pouring Money'
Gains in the yen may accelerate after a report showed Japan's machinery orders grew in October.
Private machinery orders excluding shipping and utilities rose a seasonally adjusted 4.8 percent in October, compared with a 10 percent drop in September, the Cabinet Office said. A 6 percent increase was expected, according to the median forecast of economists surveyed by Bloomberg News.
``More foreign investors such as hedge funds are pouring money into Japan,'' said Yuji Saito, a currency sales dealer at Societe Generale Bank in Tokyo. ``This move keeps the yen's unilateral decline under control, amid already dollar bullish sentiment.''
Against the yen, the New Zealand dollar dropped the most among the 16 most-actively traded currencies after Reserve Bank Governor Alan Bollard said the currency's level was `unjustified.'' He today raised interest rates for a ninth time since January 2004.
The yen has dropped almost 13 percent against the New Zealand dollar this year as the rate gap widened. Japan's currency gained about 0.9 percent against New Zealand's today.
``The New Zealand dollar's sharp decline triggered yen buying,'' said Tohru Sasaki, a currency strategist in Tokyo at JPMorgan Chase & Co. and a former Bank of Japan chief currency trader.
To contact the reporter on this story:
Keiko Ujikane in Tokyo at [email protected]
.... vediamo se ci becco a questo giro.
io l'ho tirato fupri facendo una ricerca con google su internet me lo sono scaricato per il metastock e poi me lo sono settato ad hoc. 
