The yen posted its first weekly decline against the dollar in two months as Japan’s inflation slowed and industrial production slumped, adding to bets the central bank will pump cash into the economy at a faster pace.
Japan’s currency depreciated for a third week versus the euro as Bank of Japan policy board member Hidetoshi Kamezaki said officials may consider “extraordinary steps” to improve access to funding for companies. The dollar fell for a fifth week against the euro as reports showed U.S. holiday-season spending declined.
“The economic outlook for Japan remains dark,” said Gareth Sylvester, senior currency strategist in San Francisco at HiFX Plc, a U.K.-based foreign-exchange brokerage firm, in an interview on Bloomberg Television. “That should be reflected in yen weakness.”
Japan’s currency fell 0.5 percent to 90.81 per dollar at 4:54 p.m. in New York, from 90.38 yesterday. It slid to 90.99 on Dec. 23, the weakest level since Dec. 15. The yen may decline to 92 per dollar in three weeks before strengthening to 85 in the first quarter of 2009, according to Sylvester. The yen fell 0.6 percent to 127.40 per euro from 126.67. The euro was little changed at $1.4023 from $1.4025.
The ruble declined to a record against the euro as Russia’s central bank extended devaluation to compensate for falling crude oil prices. The ruble dropped as much as 1.6 percent to 40.8931 per euro, the weakest level since the European currency was introduced in 1999. It touched a four-year low of 29.0577 against the dollar, dropping 19 percent since early August.
Weaker Pound
Sterling moved closer to parity with the euro yesterday, sliding to a record 97.32 pence. The pound was quoted at 96.03 pence and $1.4634 today.
The yen fell 1.7 percent this week versus the dollar, the first weekly decline since the five days ended Oct. 31, and weakened 2.5 percent versus the euro. Japan’s currency also slid 2.2 percent against the Australian dollar and 1.8 percent versus New Zealand’s currency. The U.S. dollar decreased 0.8 percent versus the euro from Dec. 19.
Japan’s consumer price index excluding fresh food rose 1 percent last month, after increasing 1.9 percent in October, the government said today in Tokyo. Factory output tumbled 8.1 percent in November from the previous month, the fastest pace in 55 years.
The central bank lowered the overnight lending rate on Dec. 19 to 0.1 percent from 0.3 percent, the second cut in two months, and decided to buy corporate debt for the first time to pump money into the ailing economy.
BOJ Policy
Room for cutting borrowing costs further is “limited,” and the bank’s next policy steps should focus on improving funding for companies and influencing longer-term borrowing costs, Kamezaki told reporters.
“Additional policy easing isn’t likely to focus on the benchmark rate,” Masafumi Yamamoto, head of foreign-exchange strategy for Japan at Royal Bank of Scotland Plc in Tokyo and a former BOJ currency trader, wrote in a research note today. “A sudden decline in the inflation rate could push nominal long- term yields lower and become a reason to sell the yen.”
Japan’s currency gained 28 percent against the euro and 23 percent versus the dollar this year as the global recession and $1 trillion in losses on mortgage-related securities worldwide prompted Japanese investors to sell higher-yielding assets and repatriate overseas earnings. It was on course for a 57 percent advance against the Australian dollar and a 67 percent increase versus the British pound.
Yen and Exports
The surge of the yen, which reached a 13-year high of 87.14 per dollar on Dec. 17, is amplifying the woes of exporters including Toyota Motor Corp., Honda Motor Co. and Sony Corp. Japan’s overseas sales declined a record 27 percent in November from a year earlier, the Finance Ministry reported on Dec. 22.
The yen may weaken as the drop reduces demand for the currency, according to Boris Schlossberg, director of foreign- exchange research in New York at GFT Forex, an online currency brokerage.
“Japan is really losing a lot of its ability to generate surplus from its trade,” said Schlossberg in an interview on Bloomberg Television. “That’s really changed the mind of the market as far as the safe-haven status of the yen goes.”
The U.S. greenback declined for the week against the euro as the recession led consumers to trim spending. U.S. retail sales fell as much as 4 percent this holiday season as consumers limited purchases to necessities, according to SpendingPulse.
“The dollar looks vulnerable and may fall by the middle of next year,” said Akifumi Uchida, deputy general manager of the marketing unit at Sumitomo Trust & Banking Co. in Tokyo. “The state of the U.S. economy suggests the dollar will weaken.” The dollar may reach its post-World War II low of 79.75 yen next year, he said.
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Saturday, December 27, 2008
Dollar May Decline to 84 Yen, Bank of Tokyo-Mitsubishi UFJ Says
The dollar may fall to around 84 yen based on trading patterns, according to Masashi Hashimoto, a currency analyst at Bank of Tokyo-Mitsubishi UFJ Ltd. in Tokyo.
The currency may weaken to 84 yen on a decline below so- called support at the five-day moving average of 90.27 yen, Hashimoto said. The currency also may extend its 19 percent loss against the yen this year after a failure to rise above so- called resistance at the 21-day moving average of 91.59. The greenback triggered a triangle formation in December that targets the 84 yen level, he said.
“The 21-day moving average has been weighing on dollar-yen since yesterday, so it may break below” 90.27 yen, Hashimoto said. “The target of the triangle that had been triggered is around 84 yen.”
The dollar traded at 90.42 yen as of 2:05 p.m. in Tokyo from 90.38 yen late in New York yesterday. The 84 yen level was last traded in July 1995. The U.S. currency reached a record low of 79.75 yen in April 1995.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance is where sell orders may be clustered, while support is where there may be buy orders.
The currency may weaken to 84 yen on a decline below so- called support at the five-day moving average of 90.27 yen, Hashimoto said. The currency also may extend its 19 percent loss against the yen this year after a failure to rise above so- called resistance at the 21-day moving average of 91.59. The greenback triggered a triangle formation in December that targets the 84 yen level, he said.
“The 21-day moving average has been weighing on dollar-yen since yesterday, so it may break below” 90.27 yen, Hashimoto said. “The target of the triangle that had been triggered is around 84 yen.”
The dollar traded at 90.42 yen as of 2:05 p.m. in Tokyo from 90.38 yen late in New York yesterday. The 84 yen level was last traded in July 1995. The U.S. currency reached a record low of 79.75 yen in April 1995.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance is where sell orders may be clustered, while support is where there may be buy orders.
Friday, December 26, 2008
Holiday Sales in U.S. Fell as Much as 4%, SpendingPulse Says
U.S. retail sales fell as much as 4 percent this holiday season as consumers limited purchases to necessities and cut back on clothing, electronics and jewelry, according to SpendingPulse.
Spending figures are the lowest since MasterCard Advisors started tracking data in 2002 to provide the SpendingPulse service, said Michael McNamara, vice president of research and analysis. He estimates sales, excluding autos and gasoline, fell 2 percent to 4 percent from Nov. 1 through yesterday.
Consumers facing a recession, tightening credit and the highest unemployment rate in 15 years shortened their gift lists and spent less. Retailers including Macy’s Inc. and AnnTaylor Stores Corp. responded by increasing markdowns, which stand to hurt profit margins in what may be the weakest holiday season in four decades.
“Overall this has been one of the most challenging holiday seasons on record,” McNamara said today in an interview.
The SpendingPulse figures follow forecasts of falling sales from other industry groups. Sales at stores open at least a year may drop as much as 2 percent in November and December, the International Council of Shopping Centers said on Dec. 23, more than the previously projected 1 percent decline.
Apparel, Luxury
From Nov. 1 through Dec. 24, women’s clothing sales dropped 23 percent and men’s fell 14 percent, according to SpendingPulse.
Combined electronics and appliance sales tumbled 27 percent, with purchases over $1,000 suffering the most, according to SpendingPulse data. Luxury sales, including jewelry, plunged 35 percent, the data showed.
Purchases over the Internet fared better, with a 2.3 percent decline. E-commerce may have been helped by inclement weather at the end of the holiday shopping season, McNamara said. Historically Web sales have posted 15 percent to 20 percent year- over-year sales gains.
The SpendingPulse data service calculates its sales estimates based on MasterCard Inc. network transactions and adjusts for cash, checks and other payment forms. MasterCard is the world’s second-biggest credit-card company.
Deeper Recession
The U.S. economy shrank in the third quarter at a 0.5 percent annual pace, the worst since 2001, according to the Commerce Department. Consumer spending fell the most in almost three decades and forecasters project an even deeper slump in the final three months of this year. Jobless claims rose yesterday to a 26-year high.
Retail sales declined 5.3 percent Dec. 19 to 21 because of inclement weather and a slowing U.S. economy, Chicago-based research firm ShopperTrak RCT Corp. said yesterday in a statement.
“It’s a terribly challenging environment for retailers,” Scott Krugman, a spokesman for the National Retail Federation, a Washington-based trade group, said in a Dec. 24 Bloomberg Television interview. “The week after Christmas is going to be more crucial for retailers than ever. The Friday after Christmas, with the discounts we’re hearing about, is going to be like another Black Friday.”
The Standard & Poor’s 500 Retailing Index has shed 34 percent this year, with only two of its 27 companies gaining.
The index doesn’t include Wal-Mart Stores Inc., the world’s largest retailer, which rose 15 cents to $55.44 yesterday in New York Stock Exchange composite trading. Wal-Mart shares have gained 17 percent this year.
The U.S. stock market was closed today for the Christmas holiday.
Spending figures are the lowest since MasterCard Advisors started tracking data in 2002 to provide the SpendingPulse service, said Michael McNamara, vice president of research and analysis. He estimates sales, excluding autos and gasoline, fell 2 percent to 4 percent from Nov. 1 through yesterday.
Consumers facing a recession, tightening credit and the highest unemployment rate in 15 years shortened their gift lists and spent less. Retailers including Macy’s Inc. and AnnTaylor Stores Corp. responded by increasing markdowns, which stand to hurt profit margins in what may be the weakest holiday season in four decades.
“Overall this has been one of the most challenging holiday seasons on record,” McNamara said today in an interview.
The SpendingPulse figures follow forecasts of falling sales from other industry groups. Sales at stores open at least a year may drop as much as 2 percent in November and December, the International Council of Shopping Centers said on Dec. 23, more than the previously projected 1 percent decline.
Apparel, Luxury
From Nov. 1 through Dec. 24, women’s clothing sales dropped 23 percent and men’s fell 14 percent, according to SpendingPulse.
Combined electronics and appliance sales tumbled 27 percent, with purchases over $1,000 suffering the most, according to SpendingPulse data. Luxury sales, including jewelry, plunged 35 percent, the data showed.
Purchases over the Internet fared better, with a 2.3 percent decline. E-commerce may have been helped by inclement weather at the end of the holiday shopping season, McNamara said. Historically Web sales have posted 15 percent to 20 percent year- over-year sales gains.
The SpendingPulse data service calculates its sales estimates based on MasterCard Inc. network transactions and adjusts for cash, checks and other payment forms. MasterCard is the world’s second-biggest credit-card company.
Deeper Recession
The U.S. economy shrank in the third quarter at a 0.5 percent annual pace, the worst since 2001, according to the Commerce Department. Consumer spending fell the most in almost three decades and forecasters project an even deeper slump in the final three months of this year. Jobless claims rose yesterday to a 26-year high.
Retail sales declined 5.3 percent Dec. 19 to 21 because of inclement weather and a slowing U.S. economy, Chicago-based research firm ShopperTrak RCT Corp. said yesterday in a statement.
“It’s a terribly challenging environment for retailers,” Scott Krugman, a spokesman for the National Retail Federation, a Washington-based trade group, said in a Dec. 24 Bloomberg Television interview. “The week after Christmas is going to be more crucial for retailers than ever. The Friday after Christmas, with the discounts we’re hearing about, is going to be like another Black Friday.”
The Standard & Poor’s 500 Retailing Index has shed 34 percent this year, with only two of its 27 companies gaining.
The index doesn’t include Wal-Mart Stores Inc., the world’s largest retailer, which rose 15 cents to $55.44 yesterday in New York Stock Exchange composite trading. Wal-Mart shares have gained 17 percent this year.
The U.S. stock market was closed today for the Christmas holiday.