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Dollar Yen rose to 102.20 on Hamada & Miyao's comments, Stocks advance.

Posted by Chris Advincula on May 28, 2013 6:53:00 AM

May 28 Monday 11:00 GMT

LONDON – The Japanese Yen fell as the stock market advanced in both Asia and Europe after a dovish comment from an advisor to Japan’s Prime Minister Shinzo Abe who said that the central bank can add to its unprecedented stimulus policy if necessary, to revive the economy in Japan. 

Koichi Hamada, a retired Yale University professor advisor to Japan’s Prime Minister Shinzo Abe said that Governor Haruhiko Kuroda should continue to trust in his judgment and ease further if need. He added that the policy is working as well or better than expected. 

Dollar yen rose sharply to 101.80 from 101.04 (+76 points) in Tokyo following Hamada’s comment and made extended gains in Europe to 102.28 from 101.77 (+51 points).  Euro-yen on the other hand rose to the European high of 131.98 from 130.70 in Tokyo (+128 points). 

Last month, the Bank of Japan made a pledge to double bond purchasing efforts to secure a 2 percent inflation target to fight Japan’s deflationary problems. BOJ board member Ryuzo Miyao today said that the BOJ will fine-tune market operations to ensure its massive easing campaign will not derail. 

Nikkei rose 169 points to 14,311 (+1.20%), Euro Stoxx rose 40.29 points to 2,835 (+1.44%), FTSE rose 111 points to 6,765 (+1.67%) and the German DAX rose +94 points to 8,477 (+1.14%) as of 11:00 GMT. 

The 21-day moving average for dollar yen  rose from 101.12 to 102.20 and eased to 102.00 on the intraday chart. The 90-day moving average converged with the 21-day moving average at the 102.00 level after having risen from 101.04.

yen.tech.5.28 resized 600

Chart: FXTrek.com

 

Chris Advincula

WorldWideMarkets

 

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