Yen, Aussie Lead Asia-Pacific in Boosting Currency-Trade Share on Growth
Sept. 1 (Bloomberg) -- Former Bank of Japan board member Nobuyuki Nakahara talks about the central bank's decision to expand a bank-loan program as a means of halting the yen's advance. He speaks from Tokyo with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Aug. 31 (Bloomberg) -- Shaun Osborne, chief currency strategist at TD Securities Inc., talks about the outlook for the dollar-yen exchange rate. Osborne speaks with Deirdre Bolton on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Aug. 31 (Bloomberg) -- Thomas Harr, Singapore-based Asia foreign-exchange strategy head at Standard Chartered Plc, talks about Japan's attempts to stem gains in the yen. Bank of Japan Governor Masaaki Shirakawa and his board expanded a bank-loan program by 10 trillion yen ($118 billion) after an emergency meeting yesterday in the wake of the yen reaching a 15-year high. Harr also discusses the outlook for the Japanese and U.S. economies. He speaks with Linzie Janis on Bloomberg Television's "Global Connection." (Source: Bloomberg)
Aug. 31 (Bloomberg) -- Thio Chin Loo, a senior currency analyst at BNP Paribas SA, talks about the options available to Japanese policymakers to curb the advance of the yen. She speaks from Singapore wiith Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Asia Pacific currencies increased their share of the $4 trillion a day global foreign-exchange market, a Bank for International Settlements survey showed, as the area’s economies outpaced the rest of the world.
About 35.9 percent of foreign-exchange trades involved Asia-Pacific currencies including the Japanese yen, the South Korean won and the Hong Kong and Singapore dollars, the BIS said in the report, which is released every three years. That compares with 33 percent in April 2007. The Australian dollar passed the Swiss franc to become the world’s fifth-most traded currency. The greenback’s and the British pound’s shares shrank.
Demand for Asia Pacific currencies is rising as investment and domestic demand boost growth in a region that led the world out of last year’s recession. Wealth in the Asia-Pacific region, excluding Japan, is expected to rise at almost double the global rate, the Boston Consulting Group said in June.
“The BIS report is in tune with the outperformance of developing Asia to the advanced economies of the world,” said Geoff Howie, a senior vice president in Singapore at MF Global Singapore Ltd., part of the world’s largest broker of exchange- traded futures and options. “Aside from capital inflows to support manufacturing expansion, the intrinsic growth of developing Asia is fast becoming the investment alternative which requires real currency flow.”
Asian Growth
Economies in developing Asia are forecast to expand 9.2 percent this year, double the rate of global growth of 4.6 percent, the International Monetary Fund said July 7. Stock markets in Sri Lanka, Indonesia and Thailand are among the world’s best performers this year as investors seek assets in emerging markets.
Reports today showed Australia’s economy grew 1.2 percent in the second quarter, the fastest pace in three years, while manufacturing in China expanded at a faster pace in August.
Trades involving the yen increased to 19 percent of average daily transactions in April 2010 from 17.2 percent in 2007, the BIS report showed. The Australian dollar was used in 7.6 percent of all trades, up from 6.6 percent, the Hong Kong dollar was involved in 2.4 percent, Korea’s won in 1.5 percent and Singapore’s dollar in 1.4 percent, the BIS said.
Dollar, Pound Used Less
The U.S. dollar was used in a smaller proportion of foreign-exchange transactions. Some 85 percent of currency trades in the three-year period involved the dollar, down from a 90 percent peak in the BIS’s 2001 survey. Europe’s single currency increased its portion by 2 percentage points to 39 percent. The pound fell to 12.9 percent from 14.9 percent.
Japan is the world’s third-largest foreign-exchange center after Britain and the U.S., the BIS said. Singapore is fourth, with Hong Kong and Australia sixth and seventh, respectively.
The Asia-Pacific region will increase its share of global wealth from 15 percent last year to almost 20 percent in 2014, with China and India the engines of growth, according to the Boston Consulting Group.
The need for capital to finance Asia’s economies will fuel the growth of the region’s foreign-exchange, bond and equity markets as well as its financial institutions, Tony Tan, deputy chairman of the Government of Singapore Investment Corp., manager of more than $100 billion of the nation’s foreign reserves, said July 23.
Citigroup Inc. yesterday said it plans to almost triple its workforce in China to as many as 12,000 people in the next three years, intensifying its rivalry with HSBC Holdings Plc in the world’s fastest-growing major economy.
The BIS was formed in 1930 and acts as a central bank for the world’s monetary authorities. Its Central Bank Survey of Foreign Exchange and Derivatives Market Activity is based on data from 53 institutions.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
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