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February 15, 2016

Yen surges due to stock markets rise and agressive Abe rhetorics, USD falls.

Yen surges due to stock markets rise and agressive Abe rhetorics, USD falls.

Dollar gained against Japanese Yen in Asian session as Prime Minister Abe comments about volatility successfully warned investors about possible interventions and pick up on equity markets, which reduced a demand for safe heaven asset.
MSCI Asian index added 2.24% after declining 4% last week, while Japanese Nikkei 225 soared 7.3%, tech companies are best performers.
Trading data from China falls short of expectations: Country exports declined 11.2% comparing to last year. This change shows how successful were an efforts of switch of Chinese investment-stimulated model to consumption-driven, with a cutback in manufacturing.
Japanese economic data demonstrated contraction of GDP by 1.4% in the period of October-December 2015, more than 1.2% expected, mainly due to decrease in exports and a drawdown in consumer spendings.
Prime Minister Sinzo Abe raised concerns on excessive volatility on the currency market and that government will take measures to rein back Yen fluctuations if it threats further economic growth.
Abe also expressed hopes that the management of G20 will act accordingly to withstand threatening global economic setback and take necessary measures in Shanghai meeting which is to be held in next week. The rhetorics of Prime Minister boosted the depreciation of Yen which dropped against the Dollar by 0.6% to 113.92, bouncing off the 15-month low of 110.985, where Yen found itself in last week session.
PBOC took advantage of recent fall of USD and set the monthly exchange rate of USD/CNY on Monday, hoping to curb rumors about possible devaluation. The head of central bank said to Caixin interview that China will keep Yuan stable against the basket of other major currencies, eschewing from volatility control to USD.

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