Wednesday, September 15, 2010

Yen Down Big On Japan Intervention

Dollar Yen Paper Currency
Dollar Rockets Higher Versus Yen As Japan Intervenes

By InstaForex

The dollar rallied versus the yen Wednesday morning as Japanese officials intervened in the currency market, snapping up greenbacks to halt the dramatic ascent of their currency.

A stronger yen hurts the export-driven Japanese economy by making goods more expensive to consumers abroad.

After officials failed to talk down the yen in recent weeks, Finance Minister Yoshihiko Noda confirmed today's intervention at a news conference in Tokyo.

Noda declined to provide details on the size of the intervention.

"We conducted intervention to contain excessive movements in the currency market. We will continue to watch developments in the market carefully and we will take bold actions including further intervention if necessary," Noda told.

The buck jumped to Y84.50 after hitting a fresh 15-year low of Y82.86 late last night.

At 7:30 am ET, the buck was quoted at $1.2980 versus the euro, an improvement from yesterday's monthly low of $1.3030.

Eurozone annual inflation slowed from a 20-month high in August, official figures showed on Wednesday.

Consumer prices in the 16 Eurozone countries were up 1.6%, Eurostat said, matching the preliminary estimate and in line with expectations.

The dollar was stuck in neutral versus the sterling, unable to pare much of yesterday's losses. The buck held near 1.5525 in choppy trading.

Inflation in the U.K. is running much too high for comfort and there was a great deal of uncertainty over the outlook for prices, a senior Bank of England policymaker was quoted as saying on Wednesday.

Looking at today's economic calendar from the US, traders are likely to focus on industrial production data, along with reports on New York state manufacturing activity and import and export prices.