Arab Today, arab today dollar above 100 yen for first time in 4 years
Last Updated : GMT 08:42:57
Arab Today, arab today
Arab Today, arab today

Dollar above 100 yen for first time in 4 years

Arab Today, arab today

Arab Today, arab today Dollar above 100 yen for first time in 4 years

New York - AFP

The US dollar topped 100 yen for the first time in more than four years on Thursday as Tokyo\'s aggressive stimulus efforts to reflate the Japanese economy continue to depress its currency. The dollar at 2000 GMT was trading at 100.62 yen, up from 99.01 late Wednesday and from 77.25 yen in late September 2012. The dollar last traded above 100 yen in April 2009. The yen\'s 30 percent plunge against the dollar since late last year comes on the back of the Japanese government\'s efforts to kick-start its economy out of a deflationary spiral. The fall only accelerated in the wake of the aggressive bond-buying program unveiled in April by the Bank of Japan that by some benchmarks dwarfs the size of US quantitative easing. Currency watchers had widely expected the dollar to bust the 100-yen mark. But it comes amid international concern that Tokyo could be engaging in a so-called \"currency war\" -- pushing the yen lower to boost exports. Japanese officials have repeatedly emphasized that their stimulus measures are aimed at strengthening their domestic economy, not at boosting the competitiveness of its goods in international trade. The Bank of Japan declared that a key goal of its policy is to attain a two percent inflation rate. Late last month the BoJ suggested the policy was working when it boosted its growth estimate for the fiscal year to 2.9 percent from the 2.3 percent forecast made in January. The bank also tipped inflation to hit 0.7 percent, up from an earlier projection of 0.4 percent. Meanwhile Tokyo stocks have rocketed, with the Nikkei Index gaining 37 percent since the beginning of the year. The stimulus measures have cheered exporters and boosted consumer sentiment, yet some commentators worry Japan is on a \"sugar high\" and that the stimulus measures will not work, said Scott Seaman, a senior analyst for Asia at Eurasia Group. \"The story right now looks pretty decent,\" Seaman said. \"But if (the policies) don\'t work out, then you\'ve dug an even deeper hole.\" Prime Minister Shinzo Abe has faced pressure from the Organization for Economic Cooperation and Development and the Group of 20 leading economies to present a plan to confront Japan\'s staggering public debt, which would involve austerity measures that run counter to current policies, Seaman said. \"It\'s a very complex, fragile set of policies and everything has to work right,\" Seaman said. Japan has been the target of veiled warnings from the United States and Europe, as well as emerging economies, over the yen\'s sharp fall. On April 12 Washington took note of the Bank of Japan\'s stimulus program and warned Tokyo \"to remain oriented towards meeting respective domestic objectives using domestic instruments and to refrain from competitive devaluation and targeting its exchange rate for competitive purposes.\" The International Monetary Fund and the G20 have both officially given approval to the BoJ effort, but they too have cautioned over the currency war risk. The issue was underscored in a G20 communique in April, agreed by Tokyo, that pledged the group \"will refrain from competitive devaluation and will not target our exchange rates for competitive purposes.\" While not surprising, the dollar\'s rise past the 100-yen line Thursday was helped by improved US economic data, including unexpectedly strong jobs market numbers. Thursday\'s Department of Labor report -- which showed fewer unemployment benefits claims than expected -- likely gave the dollar a boost, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. \"It was seen as an inevitability that the dollar yen would just break though 100,\" Esiner said. \"Any time you get a number of attempts, eventually it will go through that level.\" In addition, other major economies joined the rate-cutting in recent days, boosting the dollar while sending their own currencies lower. The European Central Bank lowered its main rate on May 2; Australia\'s central bank lowered its benchmark earlier this week, and South Korea on Thursday cut its key rate. The Korean won had struck a five-year high versus the yen, which was \"a strong motivation for them to ease because South Korean companies are major competitors of Japanese corporations in many export markets,\" said currency analyst Kathy Lien of BK Asset Management.

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Arab Today, arab today dollar above 100 yen for first time in 4 years Arab Today, arab today dollar above 100 yen for first time in 4 years

 



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