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 In a mixed day for stock markets, the yen's falls helped generate
some limited gains for the Nikkei, while a strong batch of
industrial orders numbers out of Germany helped European shares
recover from their worst week since mid-February.
But Shanghai <.SSEC> sank almost 3 percent after worse-than-expected
Chinese trade numbers. Those added to the more general doubts about
the pace of global growth and the likelihood of rises in interest
rates this year generated by Friday's U.S. jobs data.
An almost 15 percent surge for the yen has been the big currency
story of the past six months and traders remain skeptical over the
chances of Tokyo making good on repeated threats to counter the move
in the absence of global support.
Japan is the developed world's most consistent interventionist on
markets over the past two decades as it strives to find a way out of
a cycle of low growth and low inflation.
 But previous bouts of yen selling have tended to come with at least
tacit blessing of its international partners and this time
Washington seems opposed.
"Finance Minister Aso stated strongly that sudden yen strength or
weakness is bad and that Japan has the means to intervene," said Lee
Hardman, a currency analyst with Bank of Tokyo-Mitsubishi UFJ in
London.
"He also attempted to alter market expectations that US opposition
will prevent Japan from intervening. Overall, the comments do not
significantly change our view that direct intervention to dampen yen
strength remains unlikely in the near-term."
The dollar, which hit an 18-month low against the yen last week
<JPY=>, was up almost half a percent in morning trade in London at
107.60 yen. That is down from 123 yen last December.
[to top of second column] |
WILD FIRE
World oil prices gained for a third straight day on worries over
problems with supplies due to devastating wildfires in Canada.
The recovery in the value of crude this year has tended to be a
positive for stock markets, encouraging hopes that consumer prices
will also start rising again, easing the burden of debts weighing on
companies and governments and allowing more investment.
Against that is the impact on oil companies' operations of shutdowns
caused by the fires. Dealers said that European-listed oil majors
were shielded by the impact being chiefly on Canadian operations,
with BP <BP.L> shares up 0.2 percent.
German industrial orders also offered some reason for optimism,
rising more than expected and by the steepest rate in nine months,
due to strong foreign demand especially from countries outside the
euro zone.
The pan-European FTSE 300 index <.FTEU3>, Germany's DAX <.GDAXI> and
France's CAC <.FCHI> all rose by more than 1 percent.
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