TOKYO, Japan (AFP) — The yen weakened Tuesday as Japanese officials ramped up a bid to tame the surging currency, while the Philippine peso ticked higher with anti-establishment firebrand Rodrigo Duterte set to become the country’s new president.
After soaring to 18-month highs against the dollar, the yen has sagged as officials threaten to intervene in currency markets to stop its “speculative” rally.
On Tuesday, finance minister Taro Aso repeated warnings about possible action, after saying Monday that Tokyo was “prepared to intervene” in markets.
That followed recent similar comments from Prime Minister Shinzo Abe, who warned over the negative impact of a stronger yen on Japanese firms, in what appears to be a bid to talk down the currency.
“Certainly the increase in Japan’s talk about intervention is drawing market attention,” Sean Callow, a Sydney-based senior foreign-exchange strategist at Westpac Banking, told Bloomberg News.
But “Japanese officials run the risk of being ‘the boy who cried wolf’ if they keep talking without acting”.
Japan last intervened in currency markets around November 2011, when it tried to stem the yen’s rise against the dollar to keep an economic recovery on track after the quake-tsunami disaster earlier that year.
On Tuesday, the dollar rose to 108.81 yen from 108.34 yen in New York and 107.39 yen on Monday in Tokyo.
The euro also rose to 123.80 yen from 123.29 yen in US trade, while it edged down to $1.1379 from $1.1381.
The peso retraced early losses against the greenback, rising 0.4 percent as traders bought back the unit despite uncertainty about Duterte’s economic policy plans.
The 71-year-old firebrand stormed to victory in Monday’s election, after an incendiary campaign dominated by his profanity-laced vows to kill criminals.
“Rodrigo Duterte’s election platform lacked any content regarding his economic policies, creating considerable uncertainty about his future economic reform agenda,” Rajiv Biswas, Asia-Pacific Chief Economist at IHS Global Insight, said in a commentary.
“If he appoints a strong economic frontbench with well-respected economists with a strong track record, this could reassure investors and restore confidence in the medium-term outlook for the Philippines economy.”
In other trading, the dollar soared more than one percent against the oil-linked Malaysian ringgit on a slump in crude prices.
dhl/pb/eb
© 1994-2016 Agence France-Presse
