By Masaki Kondo and Monami Yui - Mar 7, 2012 11:05 PM PT
The yen weakened against all of its major peers after Japan posted a record current-account deficit, threatening to undermine the currency’s haven status.
The euro advanced for a second day against the yen and the dollar before Greece’s debt-swap offer to private creditors concludes at 10 p.m. Athens time today. The dollar was 0.7 percent from a nine-month high against the yen as speculation eased that the Federal Reserve will provide further stimulus. The New Zealand dollar gained versus 15 of its 16 peers as Asian stocks extended a global rally, boosting demand for higher- yielding currencies.
“Japan’s current-account deficit exceeded expectations, fueling concerns about its economic growth and fiscal problems,” said Yuji Saito, director of the foreign-exchange department inTokyo at Credit Agricole CIB. “This is spurring selling of the yen.”
The yen fell 0.3 percent to 81.30 per dollar as of 7:02 a.m. in London from the close in New Yorkyesterday after touching 81.87 on March 2, the weakest since May 26. It lost 0.5 percent to 107.11 per euro. The 17-nation euro strengthened 0.2 percent to $1.3170.
Japan posted a current-account deficit of 437.3 billion yen ($5.4 billion) in January, the Ministry of Finance said today. That is the biggest shortfall since comparable data began in 1985 and was more than the median estimate of a 320 billion-yen gap in a Bloomberg News survey of economists.
Separate figures showed Japan’s economy contracted less than the government’s initial estimate last quarter.
Greece Bailout
The euro rallied yesterday against the yen and dollar as German Finance Minister Wolfgang Schaeuble said he’s “quite optimistic” that the so-called private-sector involvement element ofGreece’s bailout will succeed.
Investors with about 60 percent of the Greek bonds eligible for the debt swap have indicated they will participate, according to data compiled by Bloomberg from company reports and government statements. That would put the country on the verge of the biggest sovereign restructuring in history.
The Greek government has said it wants participation above 90 percent and is seeking a minimum level of 75 percent. The country is ready to force holders to accept the plan if necessary, Finance Minister Evangelos Venizelos said in a Bloomberg Television interview this week.
The euro has fallen 2.7 percent in the past three months, the second-worst performance among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen has weakened 6.3 percent, and the dollar has declined 1.3 percent.
U.S. Jobs
The number of Americans filing first-time claims for jobless benefits was unchanged at 351,000 in the week ended March 3, according to the median of economist estimates in a Bloomberg News survey before the figures are released today. That would match the lowest level since March 2008.
Another report from the Labor Department may show tomorrow that U.S. nonfarm payrolls increased by 210,000 last month after rising 243,000 in January, a separate survey of economists shows.
The Fed, which next meets March 13, bought $2.3 trillion of securities in two rounds of so-called quantitative easing, or QE, from December 2008 to June 2011.
“U.S. jobs data is quite important to predict the direction of the dollar-yen because it depends on economic and monetary policy outlooks in the U.S.,” said Yuki Sakasai, currency strategist atBarclays Capital in New York. “If the data confirms a recovery in the labor market, it will reduce the likelihood of QE3 and act as a support to the dollar.”
The MSCI Asia Pacific Index (MXAP) of shares advanced 1.2 percent today, snapping a three day decline. The Standard & Poor’s 500 Index climbed 0.7 percent in New York yesterday.
N.Z. Rate
The New Zealand dollar, known as the kiwi, added 0.6 percent to 82.11 U.S. cents, erasing an early 0.3 percent decline. The Australian dollar, nicknamed the Aussie, rose 0.3 percent to $1.0609.
“If we get a slightly better employment report, we could see stocks tick higher, and then in turn the Aussie and kiwi rally on the back of that,” Jeremy Jukes, a foreign-exchange dealer in Auckland at Velocity Trade Ltd., said about the U.S. figures. “We have a slight positive bias” for both currencies.
The Reserve Bank of New Zealand today left its official cash rate at 2.5 percent. Governor Alan Bollard said the RBNZ’s forecasts “are not inconsistent with a story that would see that remaining in place for much of this year.”
To contact the reporters on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
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