Reuters Insider - Market Pulse: Yen slips after Yellen sparks risk rally
15/11/2013 16:14
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Source: Thomson Reuters
Description: The yen slips to a two-month low against the
dollar and a four-year trough versus sterling
after Janet Yellen defends Fed stimulus.
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Transcript (May be auto-generated)
So the yellen inspired restaurant theme prevails leading European shares steady near five year highs on Friday. French media group Vivendi topping the -- Euro first 300 leaderboard after rising Q3 sales and earnings beat forecasts. Expectations. Of further Central Bank stimulus keeping the equity rally on track then. With pan European index is up around 15%. -- so far this year overall both third quarter results in Europe. Of the next 51% of the -- 600 index a bid nor make forecast but that leaves 49% of
messed. But where then end of year positioning in late November many traders like you just selloff equities. To book profits on the year as gains rather -- raising extra small gains. -- effects dumbest comments from Janet Yellen during -- senate confirmation hearing pushing the yen to a two month low against the dollar. And a four year trough against sterling UBS saying a break above. 100. Spot 61 yen -- -- the dollar could open up one O 153. Is -- -- yen bear Reuters analyst Neal Kimberly give -- back the
judge holds a week yes popular demand after all sort of viewers. -- -- It's what might that right now how how. Where where's it went ahead. Well I think that the bank loses but exuberance creeping in here -- I don't think anybody got a trade persona no anybody -- that along the dollar yen because it's been drying up the market's been focused all week on a massive. And that -- expires at 100 allot more going off tonight but you can sense from Japan I feel the mood music from Japan is saying to me look. We
can probably get it's up to 1314. Do you think that's what they're eating politically can get -- -- I think they'd like to trying get away with the year -- I think they feel this is the Marlboro sign up for a number of reasons. One thing mr. ass so standing Dublin parliament if -- talking about intervention -- reserves mean. Is that if you look at -- technology has made a lot of sense but essentially the market took -- -- bearish yet. Many not mr. Allen Mia saying that the foreign exchange rate. Is
transmission mechanism for monetary policy not an objective transmission -- but there again. We know what monetary policy in Japan it's very very accommodative. -- I think mr. Kuroda who actively seems to me almost evangelical. In these -- -- -- will do more in the first quarter because that first arrow of mr. are -- has so far been the most effective and that third out structural reform at the moment looks like a Broken Arrow to make. So I think we're gonna see more from the Bank of Japan. You -- you do
you view the markets all right so yesterday. As a -- during that was not. I don't think when mr. Dassault stands up necessarily -- What comes out of his mouth doesn't necessarily translate. Well into English summertime trip with our example. Florida these same building up a bulk of reserves for intervention proceeds essentially. 1 needs of the Central Bank a bigger. Biggest base of reserves if you will if you are considering selling those reserves to protect your currency from further weakening. That's not
what the Japanese looking they want a -- yet but the point is as soon as you mentioned Bank of Japan reserves. In the context of -- increasing them. You're essentially pushing -- into the right and you're making -- the music and don't forget on January the first. Anybody over the age of twenty in Japan will be allowed to invest one billion yen earlier. In an investment savings rapper free -- capital gains tax. I think the mood music he's being set up by the Japanese policy makers to push. That money
offshore. And I think Japanese corporates who -- it -- to invest in Japan itself. Are also being directed that white. Go west do what away from Japan InBev stock -- making yen negative and I think this is the way they see going forward. I think also the market has been squeezed out of the long dollar yen trade because it's been sold. Stable. Over the past few months in recent weeks as people I speak for the hot trade has been to go along with CNH short Japanese yen and take carry. Works uniquely Chinese --
being outlined earlier on Reuters would suggest that's got more legs and is well I can see lots of reasons for saying the yen being you know one. And I -- seven. Is interesting. Because he's -- the mood music but for next year and is is like that have a song now. With the long dollar yen traded like that -- -- and I mean yeah you're right -- again and my my how can our resisted. The. Tiger leader on that -- built thanks very much indeed. Early Neal -- gonna have a -- into RFX discussion. Finally data today
-- eurozone inflation -- point 7% its lowest level. In almost forty years on this day 9023 that was hyper inflation -- in Germany. It's up four point two trillion marks to buy one dollar. Workers were paid twice today and rush hour at lunchtime shopping wheel barrows of money to buy anything they can find before prices rose again a timely reminder. -- to this day. Germany finds it hard. Not to fear inflation. That is today's market -- find out why wage cuts in Spain distinct literally. In our breaking views
show available now on demand. I'm Axel Threlfall this is not