Monday January 10, 2005 - 14:24:43 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Yen set to appreciate
There will still be doubts over Japanese growth trends, but the most recent economic data has eased fears over a sharp downturn in growth with a rebound in production and a decline in unemployment. There will be some export concerns, but domestic companies do not appear too concerned over the yen level. During 2004, there were inflows into the Japanese stock market in all but nine weeks. The underlying investment flows are likely to offer further short-term yen support with the likelihood of further capital inflows into the Nikkei index as institutions increase their Japanese weightings. The regional pressures should also be biased towards yen appreciation, especially with speculation over a Chinese revaluation move during the first half of 2005. An unchanged Chinese policy is more likely initially and this would lead to small-scale near-term yen losses. The Japanese Finance Ministry and other regional central banks will want to slow yen appreciation and there will be dollar rallies. The longer-term trends suggest that there will be further yen gains, probably beyond 100.0, especially as the yen is undervalued at current levels.
A Chinese yuan revaluation would put upward pressure on the yen.
Wider acceptance of Asian currency gains would also strengthen the yen.
Any US protectionist pressure would be likely to strengthen the yen.
A fresh surge in oil prices would be negative for the yen.
A slide in semiconductor prices and weak export growth would hurt the yen
There is the possibility of aggressive Finance Ministry intervention to weaken the yen.
A fresh slide in Japanese consumer prices would increase resistance to yen gains.
Disappointing domestic growth figures would erode yen sentiment.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."