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08:15 Switzerland Industrial Production (QoQ) (Q4) 7.4% 4.7% 5.7% 2
08:15 Switzerland Industrial Production (YoY) (Q4) 6.1% 6.3% 7.8% 2
08:30 Switzerland SNB Interest Rate Decision (Mar 17) 0.25% 0.25% 0.25%
The yen fell back from a postwar high of Y76.36 per dollar on Thursday amid speculation that the ministry of finance would intervene to weaken the currency.
“We are seeing nervous movements. We will be keeping a close watch on the markets,” Yoshihiko Noda, finance minister, told reporters. He declined to comment on the possibility of yen intervention.
A stronger yen would add to the economic pain of rebuilding from the Tohoku earthquake and tsunami by hampering Japanese exports.
That led traders to speculate that the Ministry of Finance – which makes decisions on the currency – would instruct the Bank of Japan to sell yen in order to stem its rise.
France has convened a conference call of G7 finance ministers and central bankers in order to discuss the yen, raising the prospect of co-ordinated action to stabilise the Japanese currency even though officials said Japan had not made such a request. The G7 call is set for 7am Tokyo time on Friday.
Meanwhile, Eisuke Sakakibara, the man known as “Mr Yen” during his tenure as Japan’s top currency bureaucrat in the 1990s, said the Ministry of Finance should not intervene.
“Y79 is not a problem for Japanese corporations,” Mr Sakakibara told the Financial Times.
Analysts said the currency could become stronger on expectations that Japanese insurers and other financial groups would be bringing back assets from abroad to pay for earthquake reconstruction.
However, Rintaro Tamaki, the top currency bureaucrat at Japan’s Ministry of Finance, said the expectations were misguided.
“After the Kobe earthquake there was actually no yen repatriation. Many people are saying that the move in the yen is because of repatriation flows, but that is not happening among Japanese life insurers and institutional investors,” he said.
EUR/USD fell to $1.3870 before recovered to $1.3992. Later rate continued to go higher and printed high on $1.4054 before settling back to $1.4020.
GBP/USD rose from $1.5980 to $1.6170 before retreated to current $1.6117.
USD/JPY weakened to Y78.34/36.
At 12:30 GMT US Jobless claims report for the week to 12.03 comes, followed by CPI report and Industrial production data at 12:15 GMT.
Philadelphia Fed index is due to come at 14:00 GMT.
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