Dollar skyrockets past ¥94 level


The dollar retook ¥94 in Tokyo on Monday after a Group of 20 meeting ended in Russia without taking Japan to task over the yen’s recent weakness.

At 5 p.m., the dollar was quoted at ¥94.05-06, up from ¥92.48-52 at the same time Friday. The euro stood at $1.3335-3336, against $1.3378-3378, and ¥125.42-44, up from ¥123.72-75.

In a joint statement after their two-day meeting through Saturday, the G-20 finance ministers and central bank heads showed their determination to avoid competitive currency valuation.

The statement did not point a finger at Japan, which had drawn complaints from some nations that Prime Minister Shinzo Abe’s economic and monetary policy steps, dubbed “Abenomics,” have caused the yen’s recent sharp drop.

Yen sellers have been relieved to see the G-20 statement, traders said. The G-20 “tolerates the yen’s weakness as a consequence of monetary easing steps,” a brokerage house official said.

The dollar attracted further purchases after Abe told the Upper House Budget Committee that purchases of foreign bonds may be considered as a monetary policy option, the traders added.

“Even though the G-20 avoided blaming Japan openly, some Western countries and emerging economies will criticize Japan if the yen falls further,” a Japanese bank official said.

“Potential concerns about the yen’s fall remain strong,” a bank analyst said, predicting that the dollar is unlikely to rise much further against the yen.

“It seems difficult for the dollar to top ¥95 as options-linked dollar sales are seen intensifying around the level,” a strategist at a foreign exchange margin trading service firm said.

The greenback reached ¥94.10 around the noon, the highest in a week. But it temporarily came back below ¥94 in the afternoon on profit-taking as the U.S. market will be closed Monday for Washington’s Birthday, traders said.

Another dollar-bearish factor was speculation that Daiwa Institute of Research Chairman Toshiro Muto is deemed the frontrunner to replace BOJ Gov. Masaaki Shirakawa, the traders said.