SYDNEY (Reuters) - The Group of Seven rich nations were to join in Friday Agreed rare Concerted intervention to Restrain a soaring yen and calm after a wild Global Markets week of panicky trading as Japan scrambled to Prevent a meltdown at a nuclear power plant.
The U.S. dollar surged Two full yen to you as far as 81.70 yen, Leaving behind a record low of 76.25 it hit Thursday as The Bank of Japan kicked off the joint action.Bought it Media Reported More Than $ 25 trillion.
Japan's Nikkei share index climbed 3 percent, recouping Some of the week's stinging Losses as Japan reeled from year earthquake, tsunami & the nuclear power plant crisis.
The Last Time The G7 is attached Agreed Intervention Was a decade ago to turn a slumping euro followings icts 1999 launch.
The G7 show of Solidarity With Disaster-hit Japan cam as a surprise to-many Tokyo HAD Indicated Because It Was looking for moral support for STI Attempt to Calm Markets Rather Than joint action.
Japan's Finance Minister Yoshihiko Noda Said The Bank of Japan to sell yen HAD Begun at 0000 GMT and Other G7 central banks From The Would Intervene Their Markets have opened.
"This Is The First Coordinated Response That We Have Seen Since 2000 So It's Going To Have A Very huge resonating Effect On The Market," Said Kathy Lien, director of currency research at GFT in New York.
"Because the only type of intervention That Actually IS Coordinated intervention works and it shows all of SOLIDARITY The central banks in terms Of The Severity Of The situation in Japan."
A Source Told The BOJ Reuters aussi Would Leave the yen sold it In The Banking System Rather Than Mopping it up, Malthus Adding to The Vast Amount of liquidity It Had Already Provided support to domestic icts Markets.
Central Banks Will Often after jumping to mop up "any extra cash in the Economy That results from currency intervention for fear thats the Additional liquidity" could fuel inflation.
On Thursday, The yen soared to a record HAD high of 76.25 per dollar, eclipsing icts Historical peak of 79.75 hit in The Aftermath Of The Kobe earthquake.
The Japanese yen soared Amid speculation FIRMS Would repatriate Some of Their huge foreign assets to help pay Meet insurance claims and for reconstruction.
A strong yen could "make it more difficulty pour la Heavily export-dependent Japanese economy to recover From The triple blow of last week's earthquake, tsunami and Nuclear Threat. The damage toll SI Already Estimated at Up to $ 200 billion Japan With Almost certain to slip back Into Recession.
G7 Financial Leaders May Be Worried That a surge in the yen repatriation could "unsettle Global Markets, Creating a Crisis of Confidence That spreads from Asia to Europe and the United States.
"Long As We Have Stated, Excess Volatility and disorderly Movements in exchange rates Have adverse implications for economic and Financial Stability," the G7 Said in a statement.
Investors Were aussi Keeping a wary eye on events in Libya As The United Nations voted to impose a no-fly zone over-the country and use all Necessary Measures to Protect Civilians.Diplomatic sources said French military action "could begin Within Hour of the Security Council vote.
Were Oil price up over $ 1.50 a barrel On The decision, seen as risking Which WAS Prolonging the conflict in the North African nation.
NOT IN HISTORY G7's Favor
Still, if Past is prologue, Even massive selling official Might not Restrain The yen for long.
When Japan last intervened in September 2010, it sold a huge 2.1 trillion yen, or around $ 25 trillion Back Then, drank only managed to push up from The Dollar 82.85 to 85.77 yen.
The shock value Quickly faded by late October and The Dollar WAS down around 80.00.
"History Is not On The G7's side," Said John Norman, a currency analyst at JPMorgan, noting past acts of Concerted intervention only WORKED When backed by central bank policy Tightening ultrasound degree.
In this case, there's no chance Is Almost Of The Fed Tightening for months to come.The European Central Bank has signaled intent to hike year spleens in April, but thats not Might Help the Dollar Against the yen.
"The G7 Can Be a market mover INITIALLY, But It Should not Be a trend-changing Any More Than The September 2010 WAS yen intervention," Argueda Norman.
The G7 included Canada, France, Germany, Italy, Japan, The United Kingdom and United States.
Heightened ANXIETY
Late Thursday, President Barack Obama Said The United States Will Do All It Can to help Japan recover while playing down Fears drifting cloud of radiation "could reach the U.S. West Coast.
Rising alarm over-the unfolding disaster in the World's Third-largest economy has felt shudders Through Markets, hitting shares and commodities, as investors Sought The Safe Haven of Government debt.
Japanese engineers are raced Friday to restore a power cable At The nuclear power plant in The Hope of Restarting Needed to pumps for cold water is Overheating fuel rods and avert a Catastrophic release of radiation.
THEY officials said hoped to Fix the cable to be Two Reactors to Friday and Sunday by Two Others, Would stop work order Said in the Morning to allow helicopters and fire trucks to resume pouring Fukushima Daiichi Water on the plant.
The G7's statement deal and Obama Suggest a degree of Heightened Concern Among Top At The Threat Posed Policymakers by the disaster or at a Time When The Global Economy Is Still Recovering from icts worst downturn in Nearly 80 Years.
Europe continued to wrestle With A crippling debt crisis, and the Fed buying up IS Domestic Government debt has to stop-start SafeGuard économique Bounce Back in the United States.
"I think the World Economy IS going to go right down, and it has Happened at a time When Financial Markets Are Still Fragile," G7 central banker Said Who Declined to Be Named.
Japan's triple disaster, unprecedented in a Major Developed economy, IS Already Disrupting Global Manufacturing.
Makers of equipment for mobile phones to car maker and Chipmakers Have Warned of a squeeze on Their Businesses Given Japan's crucial role in Many supply chains That keep ticking over global trade.
The Technology Sector Felt immediate impact year after Friday's quake and tsunami sincere Japan Makes around a fifth of the World's semiconductors.
Economists fear slump extended year for the Economy.
"The Complexity Of The sheer damages Makes it Difficult to grasp The Impact of the earthquake," says Kyohei Morita, economist at Barclays Capital year.
"Indeed, An analysis of the real domestic economy alone requires an encrypted assessment not only of damages to building aussi lifeline disruptions, Planned blackouts / voluntary energy conservation and the State of nuclear power generation."
The Nikkei newspaper is Friday's The Government Reported WAS considering mandatory cuts power use for business and Households to avert a major blackout in Greater Tokyo.
The Government plans to end aussi Announced 10 trillion yen in bonds to fund emergency reconstruction, Adding To An Already massive mountain of public debt.
Still, The Effect on Global Growth May Be more limited. BNP Paribas Estimates Will the disaster or shave 3 percent from Japan's Projected GDP this year. That Would account for just 0.2 percent of world output.
(Additional reporting by Zhou Wanfeng, Leika Kihara, Daniel Flynn, Lesley Wroughton and Glenn Somerville, Editing by Ed Davies)
plenty where that came from,
Portfolio Analysis
Posted by: InterinsicValue | 03/19/2011 at 03:42 AM