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Yen Weakens as G-20 Refrains From Censuring Japan (Bloomberg)

Posted by Akhilesh Ganti on Feb 17, 2013 6:43:00 PM

Feb. 18 -- The yen weakened and Japanese stock futures rose after the Group of 20 refrained from censuring Japanese policies that have made it the worst-performing major currency in the past six months. Australian stocks and silver rose.

The yen fell to 93.86 per dollar at 8:01 a.m. in Tokyo. Japanese stock index futures rose 1.3 percent from the close in Osaka on Feb. 15. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index gained 0.3 percent. Financial markets in China and Taiwan reopen today after lunar new year holidays. U.S. markets are closed for the Presidents’s Day holiday. Silver gained 0.1 percent to $29.8275 an ounce.

Two days of talks between G-20 finance ministers and central bankers ended in Moscow Feb. 16 with a statement pledging not to “target our exchange rates for competitive purposes,” without singling out Japan. The final G-20 communique fell short of last week’s Group-of-Seven statement and means recent trends in major currencies are now set to resume, Morgan Stanley’s foreign-exchange strategy team, led by Hans Redeker in London, wrote in a research note. “There was a risk that they might have fired a warning shot at Japan,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. “They didn’t do so and that’s helped a rise in dollar-yen.”

The yen has weakened as Prime Minister Shinzo Abe campaigned for looser monetary policy to revive an economy plagued by 15 years of deflation and three recessions in the past five years. Since Abe won elections in December, the Bank of Japan has agreed to a 2 percent inflation target and to make open-ended asset purchases from 2014.

Chinese retail sales during the week-long Lunar New Year festival rose at the slowest pace in four years as a government crackdown on extravagant spending by officials limited outlays on food and drink. The New Year holiday, comparable to the peak Christmas shopping rush in the U.S., is a period when consumers in the world’s second-biggest economy splurge on food, jewelry and gifts, and government officials are wined and dined.

Industrial production in the U.S. unexpectedly shrank in January as factories took a breather after the biggest back-to- back gain in three decades. Output at factories, mines and utilities fell 0.1 percent after a 0.4 percent gain in December, figures showed Feb. 15 in Washington.


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