Yen Climbs Versus Peers After Quake Hits Northeast Japan
The yen climbed against most major peers after a magnitude 7.3 earthquake struck Japan, mirroring movements in the currency after a record temblor in 2011.
Japan’s currency surged to a record level in the days following the March 11, 2011, quake and the tsunami that led to meltdowns at a nuclear plant in Fukushima. A tsunami alert was issued for northeast Japan for the quake that shook buildings in Tokyo today.
“The yen is being bought in a knee-jerk reaction to headlines on the earthquake,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711) “Given the difference in the magnitude of this earthquake to last year’s, the impact on the currency has been quite limited. If we confirm bigger damage from the tsunami, we may see further buying of the yen.”
The yen rose 0.1 percent to 82.32 per dollar as of 5:43 p.m. in Tokyo. It climbed 0.4 percent to 106.48 against the euro. Japan’s currency was higher against 14 of its 16 most- traded peers.
The Bank of Japan (8301) led a coordinated intervention with Group of Seven nations on March 18, 2011, to counter a jump in the yen after a magnitude 9 quake struck Japan a week earlier. The disaster had stoked speculation companies would repatriate overseas assets to pay for rebuilding.
The currency reached a postwar record 75.35 per dollar on Oct. 31 last year. Japan hasn’t intervened to influence the direction of its currency since Nov. 4, 2011, the last in a series of sales that year that totaled 14.3 trillion yen ($173.6 billion), the third-largest annual sum in data going back to 1991.
Currency strength has exacerbated Japan’s economic decline as it hurts the overseas competitiveness of the nation’s exporters. Japan’s gross domestic product fell an annualized 3.5 percent in the three months through September, after a revised 0.3 percent gain the previous quarter, the Cabinet Office said in Tokyo last month
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