9 February 2001, 16:17 Forex: Yen weaker in midday London trade on BoJ rate cut, weak data
LONDON (AFX) - The yen extended its losses against major currencies
in midday trade after the Bank of Japan cut the rate on its lending
facility to banks and after the release of weak machinery orders data,
dealers said.
"There was a lot of yen-selling earlier on, after the rate cut but
it's just a sop to the finance minister who would love the BoJ to cut
rates," 4Cast forex specialist Paul Bednarczyk said.
"The real bad news for Japan came out with the machinery orders
this morning which suggest that any talk of a gradual recovery in the
economy look a little bit optimistic to say the least," he said.
The growth in machinery orders shows some sign of slowing, although
overall orders remain on the rising trend seen in the previous
quarterly assessment in September, a Cabinet Office official said.
GNI currency analyst Mark Henry said investors viewed the BoJ's
move as an admission of Japan's economic plight. "The news this morning
has been seen as yen-negative across the board but the markets today
are quite choppy," he said. Henry said the dollar would probably not
rise much further against major currencies ahead of Federal Reserve
chairman Alan Greenspan's address to the U.S. congress on Tuesday.
"We would expect that while this news out of Japan is sufficient to
put the dollar back on the front foot, if it's to really push ahead
we'd probably need some better news from the U.S. The markets will
obviously be looking to Greenspan for that next week."
Otherwise, the euro rallied slightly on position-squaring ahead of
the weekend, dealers said.
Henry said trading was particularly thin and uninspired.
"It's not been the world's greatest of week for data, and today's
no exception. We're really struggling -- the BoJ announcement aside --
to find inspiration which makes for thin Friday trading conditions," he
said.
© 1999-2024 Forex EuroClub
All rights reserved