Euro breaks through 150 yen mark for first time

TOKYO - The euro rose above 150 yen in Tokyo on Tuesday for the first time since its launch seven years ago on expectations of higher interest rates in Europe. The dollar declined against the yen.



By (AP)

Published: Tue 29 Aug 2006, 7:10 PM

Last updated: Sat 4 Apr 2015, 1:04 PM

The 12-nation euro briefly rose as high as 150.06 yen before slipping back to 149.77 yen by mid-afternoon in Tokyo.

Japan’s Finance Minister Sadakazu Tanigaki said Tuesday that he wanted to carefully watch the yen’s moves versus the euro. He did not elaborate.

The dollar, meanwhile, fell to 116.61 yen from 117.13 yen in late Monday in New York. The euro rose to US$1.2818 from US$1.2787.

Traders said the euro climbed against the yen on expectations the European Central Bank is expected to raise interest rates by the end of this year to rein in inflationary pressure in the region, while central banks in both Japan and the United States are likely to keep rates on hold. Higher interest rates tend to boost a country’s currency.

The dollar also was lower against other Asian currencies, falling to 3.6780 Malaysian ringgit from 3.6805 the previous day. It also slipped to 960.9 South Korean won from 963.8.

Meanwhile, the dollar fell against the yen in Asia Tuesday as Japanese exporters and investors sold the greenback in the lead-up to the release of the Federal Reserve’s meeting minutes later Tuesday.

The dollar fell as Japanese exporters converted their dollar-denominated profits into yen near the end of the month, while Japanese institutional investors dumped the greenback probably to lock in gains, traders said.

Some US and European investment banks also joined the sellers in a possible attempt to earn quick profits, trader said.

Currency investors were turning to the minutes for the Aug. 8 meeting by the Federal Open Market Committee due Tuesday in the global day, hoping they’ll provide hints about the outlook of US interest rates.

Teruhisa Tsuji, a currency trader at Mizuho Corporate Bank, said since the Fed paused in its two-year run of interest rate increases at the meeting, speculation has grown that the rate-hike cycle may have run its course.

“If the minutes indicate that Fed officials were divided (in their debate), the dollar could gain,” to around 117.50 yen, as people may take that as a sign that the bank isn’t done with rate hikes, Tsuji said.

But the dollar could sink to around 116.00 yen if the minutes instead suggest that that credit-tightening is over, he said.


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