The yen to the maximum 15 years on the U.S. dollar. The bund instead at historical lows

Aug 24

Posted by as ReD News

The race superyen stops. The Japanese currency has flown today to the maximum 15 years to nine years against the dollar and euro, compared to continuing deterioration of the prospects for world economic growth that drives investors to seek refuge in activities deemed safer. And the yen fall into this category as the Swiss franc, the dollar, but the German Bund.

The dollar fell to 84.12 yen, lowest since June 18, 1995, but gained ground on the euro is back on the levels of six weeks ago, to $ 1.26. The euro also fell to 106.14 yen level not touched since November 2001. On the final trading day in Europe with the euro bounce back over 106 yen, while the dollar / yen has remained at 1995 levels at an altitude of 84.

The rise of the yen has found no obstacle, despite the concern of Japanese exporters, and lower their titles on the Japanese list (Nikkei -1.3% share in 9000 to a minimum of 15 months). The president of the Tokyo Stock Exchange has urged the Japanese government to act to send a strong message to markets. "Personally - said Atsushi Saito, president of the Tokyo Stock Exchange at a press conference - I do not like the idea of direct intervention on the foreign exchange market, but the government must act to stop the current nervousness. It is important that the impression that the government vehicles have the means to intervene if necessary. " He added that the direction of the currency should not be determined solely by market forces.

But Japanese Finance Minister, Yoshihiro Noda, declined to comment on currency interventions neither Japanese nor the minimum 15 months reached today by the Tokyo Stock Exchange. He only said that the government looks "very carefully the situation in the foreign exchange market and that relations dollar / yen and euro / yen seem unbalanced." Very worried but the leader of the federation of trade unions urged the Japanese government to ask the G7 for concerted action to stabilize the foreign exchange market. The last official intervention dates back to 2004.

The movement of the yen has intensified in recent days and there were increasing signs of a possible relapse into recession in the second half of the year. Moody's has also dusted off the risks of sovereign debt in the euro area, warning that could lower the ratings of Spain, next month. From the UK came the alarm on the risk of relapse into recession from the Bank of England adviser, Martin Weale. To worsen the mood contribute to the expectations of a drop of 13% of home sales in the U.S. in July (-5.1% in June).

Only Germany has sent a note confirming the positive jump of 2.2% of GDP in the second quarter, but there are doubts about the second half and it is expected a definite slowdown. The ECB has already warned that rates are not touching and monetary policy will not change until 2011 precisely because of the guild of the global recovery.

Investors run for cover. Besides the yen and the dollar, investors looking for safe assets are also focusing on the German Bund, as in high demand and the decline in yields Cosanti ten (2.24%) and thirty years (2.86%) who Today marked new lows. However they returned to suffer the titles of European countries with a peripheral enlargement of the net premium to the German Bund. Back then to suffer Greece (867 cents, just one hundred less than the record in May), Ireland (with a spread of 305 basis points), Portugal (304) Spain (at an altitude of 178) and 'Italy (to 153).