Yen dives as BOJ plays down chance of hikes, soothing markets
Updates prices at 1215 GMT
By Harry Robertson and Ankur Banerjee
LONDON/SINGAPORE, Aug 7 (Reuters) -The yen dropped on Wednesday after an influential Bank of Japan official played down the chances of a near-term rate hike, soothing investors' concerns that a further jump in the Japanese currency could again rock global markets.
The yen JPY=EBS fell about 2.5% to a session low of 147.94 per dollar following the comments from BOJ Deputy Governor Shinichi Uchida. The dollar was last up 1.9% at 147.06 yen.
"As we are seeing sharp volatility in domestic and overseas financial markets, it's necessary to maintain current levels of monetary easing for the time being," Uchida said.
His remarks, which contrasted with Governor Kazuo Ueda's hawkish comments made last week when the BOJ unexpectedly raised interest rates, sent Japanese stocks higher .N225, leaving them effectively flat for the week.
The BOJ's hike last week, along with intervention from Tokyo in early July, led investors to bail out of once-popular carry trades in which traders borrow the yen at low rates to invest in assets that offer higher returns.
The carry unwind has combined with weak U.S. jobs data and fears about an artificial intelligence bubble to send global stocks tumbling this week, started by a 12% crash in Japanese equities on Monday.
"I think it’s become increasingly clear that the BOJ hawkish turn last week could be a policy error," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. "Japan's economy is actually in poor shape, especially domestic demand."
The U.S. dollar index =USD, which measures the currency against six rivals, rose 0.18% to 103.16, inching further above the seven-month low of 102.15 it touched on Monday.
Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments, said that "Uchida has saved the carry trade - for now".
"Japan policy is one of the important moving parts of the overall risk structure in the market. The other important ones would be U.S. economic data, which in turn informs Fed policy trajectory."
The yen's decline was broad based, with the Mexican peso, New Zealand dollar and Australian dollar - all carry trade investment candidates - surging against the currency.
The Swiss franc CHF=EBS, another currency that was used to fund carry trades, like the yen, was down around 1.1% to 0.8612 per dollar.
The euro eased 0.1% to $1.0919, down from an eight-month high of $1.101 hit on Monday as the dollar dropped. Sterling GBP=D3 was 0.27% higher at $1.2727.
Traders ramped up their bets on Federal Reserve rate cuts on Monday following an unexpected jump in the unemployment rate on Friday, at one point pricing in more than 125 basis points of reductions this year.
Those bets have gradually come down, and traders on Wednesday were expecting 100 bps of easing this year and a 62% chance of a 50 bp cut in September, having priced it as a near certainty on Monday.
In other currencies, the Australian dollar AUD=D3 was 0.67% higher at $0.6563, a day after the central bank ruled out the possibility of an interest rate cut this year, saying core inflation is expected to come down only slowly.
The Aussie has struggled in recent days, sinking to eight-month lows on Monday in the wake of the global market meltdown but perked up on the day following BOJ comments.
The New Zealand dollar NZD=D3 was up 1.05%at $0.6017 following strong jobs data.
World FX rates https://tmsnrt.rs/2RBWI5E
Japan's yen under pressure https://tmsnrt.rs/36El8HW
Japan yen positions and carry trades https://tmsnrt.rs/4c7FJk4
Peso-yen currency pair goes on round trip https://reut.rs/3YuddWO
Reporting by Harry Robertson in London and Ankur Banerjee and Vidya Ranganathan in Singapore; Editing by Shri Navaratnam, Jacqueline Wong, Kim Coghill, Peter Graff
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.