Yen Approaches 18-Month Low on Concern Japan's Economy Stallinggreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
11/29 19:06 Yen Approaches 18-Month Low on Concern Japan's Economy Stalling By Miki Anzai
Tokyo, Nov. 30 (Bloomberg) -- The yen, which hovered near a nine-month low against the dollar, may extend its decline to an 18- month low on expectations a report next week will show Japan's economic growth slowed in the third quarter.
The Japanese currency traded at 111.35 per dollar, down from 111.24 in New York yesterday, when the currency posted a biggest one-day decline in a week. Against the euro, the yen was at 95.46, near a two-month low.
``Investors are disappointed over Japan,'' said Kenji Takei, a vice president for currency sales at Societe General S.A. The yen may fall below this year's lowest of 111.73 and head toward levels last seen in August 1999, he predicted.
The Japanese government will report Monday that the economy grew 0.2 percent during the July-September period, compared with 1.3 percent in the previous three-month period, analysts surveyed by Bloomberg News predicted.
The decline in Japanese stocks, the Nikkei 225 stock average has fallen 23 percent this year, has added to investors' reluctance to buy yen, Takei added.
``The yen will stay weak throughout this year,'' he said.
The yen lost 2.3 percent of its value last week, as concern mounted that a string of Japanese companies may have trouble repaying loans, delaying the nation's economic recovery.
Kumagai Gumi Co., a general contractor seeking what would be Japan's biggest corporate debt waiver, said yesterday banks have agreed to grant about 90 percent of its requested reprieve of 450 billion yen ($4.09 billion).
Signs of further weakness in Japan's construction industry, on the heels of the collapse of two major insurance companies in October, reassured investors that although the U.S. economy appears to be slowing it's still likely to grow faster than Japan's.
The yen fell more than one percent versus the dollar yesterday after a U.S. government report showed the nation's economic growth in the third quarter slowed less than expected.
The world's largest economy expanded at a 2.4 percent annual clip, revised down from a previously reported 2.7 percent rate of increase but surpassing the 2.2 percent growth economists had forecast. The figure stoked expectation the economy, which is in a 10 year expansion, continues to outpace Japan's economy.
In other trading, the dollar was at 1.7615 Swiss francs from 1.7601 francs yesterday. The British pound was little changed at $1.4224 from $1.4222 in New York. The euro bought 85.74 U.S. cents, little changed from 85.78 yesterday.
-- Carl Jenkins (email@example.com), November 29, 2000