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Reuters: Yen Bites All; Japan Swears Off Habit of Manipulating the Yen
By David DeRosa
27/4/2001 9:29 pm Fri
[Perubahan kepimpinan Jepun mula mengheret matawang serantau.
Estrada telah ditangkap dan Gus Dur menghadapi pertuduhan rasuah.
Ini menyebabkan matawang semakin menurun dan menekan ringgit.
Yen kini diparas 123 setelah menteri kewangan baru Jepun,
Masajuro Shiokawa memberi jaminan kadar tukaran wang tidak
Ini memberi kesannya pada ekonomi Malaysia di mana pelabur akan
meninggalkan negara kerana ringgit lebih mahal. Selamat tinggal
polisi ekonomi Mahathir... mungkin itulah sebabnya kerajaan
begitu banyak betul mengeluarkan 'rancangan' dalam waktu terdekat
ini tetapi rezab tetap juga berkurang..... Malah rancangan membaiki
Umno pun menyebabkan rezab berkurang juga. Lama-lama Mahathir akan
mati aqal nampaknya....
Emerging FX-Yen,local leads bite, c.banks eyed
SINGAPORE, April 27 (Reuters) - The yen's retreat and depressing
news at home kept Asian currencies on the defensive in early trade
The yen headed back below 123.00 after Japan's new finance
minister Masajuro Shiokawa indicated exchange rates should not be
But wariness of central bank intervention in some regional markets
and position squaring ahead of the weekend should limit the
downside of most regional currencies, dealers said.
There was talk the Monetary Authority of Singapore defended its
currency around 1.8245 late on Thursday -- its fresh decade trough
-- amid expectations of M&A outflows.
Currency markets in Jakarta and Manila were also wary of potential
intervention after the rupiah crumbled to its lowest level since
September 1988 and the peso headed lower after breaking through
15-week lows of 51.00 per dollar on Thursday.
Elsewhere, the Bank of Thailand will publish weekly data on Thai
foreign reserves and forward currency swap commitments at 0800
GMT. And Taiwan is due to release data on the March bad cheque
ratio at 0540 GMT and the March index of leading indicators at 0800
The rupiah was stuck the wrong side of 12,000 as Indonesia's
political and economic woes looked set to drag it down again.
It fell to 31-month lows on Thursday ahead of a crucial parliamentary
session on Monday, when a second censure against President
Abdurrahman Wahid is expected to be debated.
Though a censure over two financial scandals is widely expected,
Wahid remains defiant, stoking fears of violent protest by his
supporters in the capital next week.
Jakarta dealers said the market was heavily long of dollars, but
unwilling to unwind positions ahead of next week's events. Charts
showed the dollar/rupiah in overbought territory, with a 14-day
relative strength index reading of around 87.
Bank Indonesia vowed on Thursday to continue its support of the
currency through intervention and interest rate hikes. But Jakarta
dealers said the bank was not in the market on Thursday.
Moreover, dealers and analysts were sceptical as to whether its
efforts would stem the rupiah's losses.
The Sing dollar hovered above 1.8190 after the MAS was rumoured
to have intervened on Thursday as talk of M&A activities and the
ailing rupiah pulled it to fresh decade lows.
But dealers said demand for the U.S. dollar remained fairly strong,
with keen buying interest seen on dips to 1.8140/50.
The Sing dollar was weighed by news airport operator Singapore
Changi Airport Enterprise had taken a 50 percent stake in British
investment and development company Alterra Partners.
There was also talk that two Singapore banks were seeking to buy
"I think the market would be reluctant to push the Sing dollar well
below 1.8200 today because of the rumours. But with M&A outflows,
the weak yen and the rupiah, it would be hard to see it rise above
1.8150," said a dealer at an Asian bank.
KOREAN WON -2
The won fell below 1,320 against 1,313 late Thursday as it tracked
the yen, which hit one-week lows against the dollar.
Dealers said local banks were early sellers of won, and bears were
encouraged after Korea issued a slew of data on Thursday confirming
the economy is in a pronounced slowdown.
The data included the current account surplus that showed a plunge
in imports, lower industrial output in March and a lower growth
forecast by the IMF.
But analysts said there was less scope for the central bank to
aggressively slash rates because of inflation concerns.
A Reuters poll showed Korea's consumer price index is expected to
have edged up 0.3 percent on-month and 4.8 percent on-year in
April due to a weak won and rising utility fees.
The Bank of Korea left its overnight call rate unchanged at 5.0
percent at its monetary policy meeting earlier this month.
THAI BAHT .
The baht edged down in line with other regionals and on worries
about worsening domestic economic prospects.
Dealers said after Thursday's cut in growth and export forecasts by
the central bank, the market would now focus on its monthly data on
manufacturing production, trade and current account balance due on
The central bank said exports would grow by 3.0-4.5 percent in
2001, down from an earlier commerce ministry projection of 11.3
percent, and actual growth of 19.6 percent last year.
It also slashed its 2002 growth forecast, widely expected after last
week's cut in 2001 growth projections.
However, dealers said the baht's downside was limited given
concerns about government plans to raise reporting requirements on
forex trade through baht bank deposits held by non-residents.
The peso extended Thursday's fall, hitting an early low of 51.20, on
worries about political violence amid street protests against former
president Joseph Estrada's arrest on charges of economic plunder -
an offence punishable by death.
Growing numbers of Estrada's supporters on the second day of a vigil
at a religious shrine in Manila, a kilometer from where he was being
held, were likely to unnerve markets.
The central bank said it did not see any speculative activity or capital
flight in the peso.
Dealers in Singapore said given rising demand for the dollar as the
import season kicked in, political problems would further weigh on the
They said early bids for dollars were seen at around 50.80 while
offers by exporters, repatriating dollars for month-end requirements,
were likely to emerge around 51.40/50.
The Taiwan dollar was poised to follow the yen lower, nearing the
key 33 support level that it last saw on January 5.
While the central bank has been spotted capping the local dollar's
gains in recent sessions, it was also believed to be defending the 33
level for now.
However, analysts said recent weak economic data, combined with
slowing external demand and heightened export competition,
warranted a weaker Taiwan dollar.
Berikut rencana deRosa sebelum keputusan pemilihan pucuk
By David DeRosa
The ruling Liberal Democratic Party could take some heavy
hits in elections this year for mishandling the Japanese economy.
The Upper House of the Diet, the nation's parliament, will be
elected in July. The Lower House and the prime minister will be
chosen at the end of September. If the LDP were to lose control of
parliament, heads could start to roll at the Ministry of Finance,
It is no coincidence that MOF officials have been trying to
sound like reformers, of all things. Reformers are the good guys
who believe, among other things, that market forces and economic
``fundamentals'' should determine the value of the yen.
Believe it or not, that is what MOF now says it wants for the
yen. MOF, it should be remembered, has spent decades trying to
manipulate the yen.
So it is of more than passing interest that on Wednesday,
Finance Minister Kiichi Miyazawa started talking about the yen and
the Group of Seven leading industrialized nations. He said he
plans to assure the nations that ``Japan will say it won't take
particular artificial steps for the currency market.''
Miyazawa is probably doing a lot of thinking about the coming
meeting of the G-7 finance ministers and central bankers in
Washington. The meetings are likely to be dominated by discussions
of what needs to be done to stimulate world growth as the U.S.
economy is slowing.
America's economic problems are new. Japan's are more than a
decade old. By now, the G-7 must be fed up with Japan's excuses
for not fixing its economy. Miyazawa has to expect unwelcome
public comments from the G-7 leaders that Japan isn't pushing fast
enough on reforms. By saying he is against ``artificial'' manipulation of the
yen, Miyazawa is signaling that he has his eye on the more
important issues of structural reform of the nation's banking
system. Whether he will be believed is another matter.
By saying he is against ``artificial'' manipulation of the yen, Miyazawa is signaling that he has his eye on the more important issues of structural reform of the nation's banking system. Whether he will be believed is another matter.
Not that the G-7 itself hasn't endorsed periodic intervention
into the currency markets over the years. But the difference
between what the G-7 does and what Japan has done in previous
times with foreign exchange is worth pondering.
Historically, the G-7 rationalizes intervention by asserting
exchange rates are out of whack with economic fundamentals. For
instance, in the early 1990s a number of coordinated interventions
were conducted to buy dollars against the yen and the German mark
on the grounds that the dollar was excessively weak relative to
fundamentals -- trade balances, monetary conditions and political
risk, among other things.
By contrast, Japan has a reputation for manipulating exchange
rates, especially the dollar-yen rate, to help its export
industries. It is not that Japan thinks the value of the yen is
wrong, per se, but rather it just doesn't like where the currency
happens to be trading.
Pity Japan, Not Hashimoto
It's also interesting to note that MOF appears to be getting
cozy with Ryutaro Hashimoto, the former prime minister who is
likely to return to fill out departing Prime Minister Yoshiro
Mori's remaining term of office. Hashimoto is slated to win the
presidency of the Liberal Democratic Party on Tuesday and be
appointed prime minister two days later.
Miyazawa is hinting that the next prime minister, whoever
that might be, will not ask him to stay in his post as finance
minister. Nonetheless, Miyazawa had some nice words for Hashimoto.
Hashimoto was the unfortunate prime minister who raised the
national sales tax from 3 percent to 5 percent in April 1997, an
inopportune time. In another interview last week, Miyazawa went
out of his way to say he was ``very sorry'' that Hashimoto had
taken so much of the blame for driving Japan's economy over a
Feel sorry for Hashimoto? How about feeling sorry for Japan?