By: Barbara Zigah
The Japanese Yen is surging as investors off-load high risk currencies in the face of yet another crisis in Japan. In Asian trading today, the Japanese yen rose against the U.S. Dollar, trading at one point as high as 82.05 Yen before settling back at 81.68 Yen. Investors are also nervous about possible intervention by the Bank of Japan. The Ministry of Finance confirmed that they have been monitoring currency rates, a tactic some traders say the central bank uses to keep them in check, but as to whether or not they did actually intercede remains unconfirmed at this time. Some market players in Singapore suggest that a large order from a Japanese investor could have triggered the scare.
Analysts expect that Japanese insurance companies will soon begin repatriating funds for claims and reconstruction expenses following last week’s 9.0 magnitude earthquake and resultant tsunami. Since then, the Yen has been pushed higher, close to record highs against the U.S. Dollar, a place unwelcome by the Japanese government which has vowed to prevent the Japanese currency from appreciating too much.
The country’s manufacturing sector is already suffering from the devastation, and a too strong Yen will not bode well for growth prospects. Yesterday, the central bank said that it would double its asset purchase program from the current $61 billion; analysts believe that they would take additional steps if deemed necessary.