|
 The Japanese currency tumbled 2 percent to a six-week low against
the dollar <JPY=> after the BOJ's shock move on Friday, the final
trading day of a jittery January in which the safe-haven yen had
risen to levels not seen in over a year.
But after a survey of Chinese manufacturers showed factory activity
in the world's second-largest economy contracted for an 11th
straight month in January, the yen's fall abated and it traded flat
at 121.15 against the dollar.
The BOJ's move to adopt negative rates only cemented expectations
the European Central Bank would ease further, sending yields on
German government bonds of up to five years' maturity below the
ECB's deposit rate on Monday.
"The broader macro focus is on the back of the BOJ and whether
that's going to pull the other key central banks with it," said Bank
of Tokyo-Mitsubishi UFJ strategist Derek Halpenny in London.
"In that sense, the data over the week ahead is going to be pretty
crucial, and that's where we going to get our direction ... That's
why we're sitting where we are with not too much price action."
The yen was roughly flat on Monday at 121.30 against the dollar <JPY=>,
having traded as weakly as 121.70 yen per dollar on Friday.
With the weak data also driving oil prices back down,
commodity-linked currencies suffered. Oil-rich Canada's dollar fell
half a percent against its U.S. counterpart.
Australia's and New Zealand's dollars, which are used as proxies by
investors for plays on China, also fell back.
[to top of second column] |
But Societe Generale currency analyst Alvin Tan, in London, said it
was too soon to write off investors' newly refound appetite for
risk. He also said data would be key this week, in particular
purchasing managers' index (PMI) surveys and U.S. labor market data
on Friday.
"The market wants validation ... that an improvement in risk
sentiment makes sense in order to carry on with this risk rally," he
said.
Some analysts believed the BOJ's surprise easing was partly aimed at
forestalling the yen's appreciation.
"BOJ Governor (Haruhiko) Kuroda added that the central bank is ready
to lower rates further if needed," wrote Naohiko Baba, chief Japan
economist at Goldman Sachs in Tokyo.
"This was likely aimed to keep retaining the currency market's
attention and prevent the yen from rising."
(Additional reporting by Shinichi Saoshiro in Tokyo and Ian Chua in
Sydney; Editing by Tom Heneghan)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
