Japanese yen nears 150 against the US dollar
The Japanese yen edged close to 150 against the greenback, at levels not seen since August 1990. It was last at 149.94 per dollar.
The yen hovered around 159.8 levels in April 1990, and last breached 160-levels in December 1986.
Japanese officials commented against further weakening of the currency Thursday, with Finance Minister Shunichi Suzuki saying the government will take “appropriate steps against excess volatility,” Reuters reported.
“Recent rapid and one-sided yen declines are undesirable. We absolutely cannot tolerate excessively volatile moves driven by speculative trading,” he said.
Japan’s trade deficit for September narrows slightly
Japan’s trade deficit for September was at 2.09 trillion yen ($13.97 billion), according to provisional figures from the government – missing estimated figures by a Reuters poll expecting a deficit of 2.17 trillion yen.
The country reported a trade deficit of 2.82 trillion yen in August.
Exports for the month of September were at 8.82 trillion yen, while imports were at 10.9 trillion yen.
Japan’s trade deficit for the first half of fiscal year 2022-2023 is the largest on record, the finance ministry was quoted as saying in a Reuters report.
Japan’s fiscal year starts in April, and the deficit for the April to September period was 11 trillion yen, data showed.
China’s offshore yuan hits record low overnight
The offshore yuan hit a record low of 7.2745 against the dollar overnight as the Communist Party of China’s National Congress continues. The offshore yuan last changed hands at 7.2708 per dollar.
“A very large uncertainty is when the Chinese government eases its strict zero-Covid policy,” according to a note by the Commonwealth Bank of Australia.
Analysts wrote that the strict measures are seen to remain until early 2023.
“The restrictions will prolong the period of weakness in China’s economy and keep AUD/USD and NZD/USD undervalued for longer and push USD/CNH up to 7.30,” the note said.
The risk-sensitive australian dollar was weaker at $0.6264 early in Asia, while the New Zealand dollar changed hands at $0.5662.
Investors weigh rising Treasury yields
Investors monitored Treasury yields for recession signals Wednesday even as a stronger-than-expected start to earnings season has helped buoy markets this week.
Of the 64 companies in the S&P 500 that have posted third-quarter results through Wednesday, 69.4% have beaten expectations, according to FactSet data.
Still, surging Treasury yields have helped stocks get back to “real life” on Wednesday, according to comments from LPL Financial’s Quincy Krosby. On Wednesday, the yield on the 10-year Treasury rose as high as 4.136%, or its highest level since July 2008.
“A steady 3-month/10-year inversion would reinforce the Treasury market’s signal that a recession is in the offing, since it has the reputation of predicting a serious economic downturn,” Krosby wrote.