Yen Slumps After Japan Intervenes to Curb Rise; Most Asian Stocks Advance
By Shiyin Chen - Aug 4, 2011 9:42 AM GMT+0800
The yen dropped the most in about five months against the dollar after Japan intervened in the foreign-exchange market to weaken its currency. Most Asian stocks rose, led by exporters, and commodities rebounded.
The yen dropped 1.6 percent to 78.32 as of 10:39 a.m. in Tokyo and also fell 1.6 percent to 112.17 versus the euro. Japan’s 10-year bond futures gained, while the Nikkei 225 Stock Average surged 1 percent. The dollar-based MSCI Asia Pacific Index fell 0.2 percent, even as two shares rose for every one that slid. Standard & Poor’s 500 Index futures added 0.6 percent. Oil rose for the first time in five days and metals jumped, led by a 1.2 percent gain in zinc.
Finance Minister Yoshihiko Noda said Japan took unilateral action to sell the yen, which earlier this week neared a post- war record. The move comes a day after the Swiss central bank cut interest rates and said it will boost the supply of francs to curb the “massively overvalued” currency. Concern the U.S. recovery is faltering had driven investors toward the relative safety of the yen and the franc, and is spurring speculation the Federal Reserve will start another stimulus program.
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