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Yen strengthens in Asia despite easing speculation

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(Globalpost/GlobalPost)

The yen strengthened in Asian trading on Tuesday despite a string of pro-easing comments from the men nominated to take over as the Bank of Japan's new leadership.

In afternoon Tokyo forex trade, the dollar was weaker at 92.97 yen against 93.46 yen in New York Monday afternoon.

The dollar's decline was largely owing to Japanese institutional investors converting overseas income, meaning they were buying large amounts of yen, a senior dealer at a major Japanese bank told Dow Jones Newswires.

The greenback also faced pressure as the sequester -- $85 billion in mandatory cutbacks to US government spending -- came into effect, after lawmakers failed to agree on a less severe approach to shrinking the federal deficit.

The euro, meanwhile, inched down to 121.25 yen from 121.74 yen in US trade.

The strengthening followed recent falls for the yen, which has been pushed down by expectations that the Bank of Japan will launch fresh credit easing measures when its new leaders take up their posts in the coming weeks.

Haruhiko Kuroda, a finance veteran the government has nominated to head the central bank, told Japan's parliament Monday that if confirmed as BoJ head, he would do "everything possible" to reverse years of growth-sapping deflation.

On Tuesday, Hiroshi Nakaso, one of Kuroda's proposed deputies, told lawmakers he was open to new ideas to beat deflation, which he called the BoJ's "important mission".

"This is a golden opportunity to achieve our long-time goal -- getting out of deflation," Nakaso said.

Kuroda's second proposed BoJ deputy, Kikuo Iwata, said the BoJ should take bolder monetary easing steps to meet a new two-percent inflation target.

Against the dollar, the euro firmed slightly to $1.3030 in Asia from $1.3024 in US trade following a meeting of finance ministers from the 17-nation eurozone on Monday.

Public sector job cuts were at the centre of Greece's bailout review as international auditors assessed the country's progress in implementing reforms before unlocking another loan to help it out of its debt crisis.

The ministers also said that a long-delayed 17-billion-euro ($22.3 billion) bailout for Cyprus could be fixed by the end of the month.

Forex markets were also keeping a close eye on fresh Chinese economic news with Beijing on Tuesday announcing it has set its 2013 economic growth target at 7.5 percent, unchanged from last year's. It pegged the nation's inflation target at 3.5 percent, lower than a 4.0 percent target last year.

The dollar was mixed against other Asia-Pacific currencies, slipping to Sg$1.2440 from Sg$1.2454 on Monday, to 1,086.45 South Korean won from 1,092.15 won, and to 54.76 Indian rupees from 54.96 rupees.

The greenback weakened to 40.70 Philippine pesos from 40.76 pesos, while firming to 9,710 Indonesian rupiah from 9,708 rupiah. It was flat at Tw$29.68 and 29.78 Thai baht.

The Australian dollar rose $1.0244 from $1.0129, while the Chinese yuan eased to 14.93 yen from 15.01 yen.

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http://www.globalpost.com/dispatch/news/afp/130305/yen-strengthens-asia-despite-easing-speculation