Japan will act to prevent ‘speculation-driven’ yen gains, Aso says
Japan’s finance minister said Tuesday that Japanese authorities will prevent “speculation-driven” gains in the yen from continuing, maintaining the threat of direct intervention in the currency markets despite U.S. opposition against the measure.
“We must watch foreign-exchange movements closely and intensely in order to ensure that speculation-driven movements won’t continue,” Taro Aso said at a regular news conference.
“If necessary, we would like to take firm action in accordance with agreements” among the Group of Seven and Group of 20 leading economies, Aso said.
His remark follows months of skirmishes with U.S. financial authorities over whether the yen’s rise this year is disorderly enough to warrant intervention in the currency markets. Aso said the yen’s appreciation seen recently was a “rapid, speculation-driven” move but he declined to comment on whether it “meets the definition of excessive movement” that major economies think justify intervention.
Most economists expect the BoJ to stay put this week
The Japanese yen strengthened further on Monday, close to breaching 106 per dollar, as concerns over Brexit flared after the latest opinion poll showed that those favoring to leave the EU have a 10-point lead.
The Bank of Japan will meet this week on June 15 and 16.
Most economists expect the BoJ to stay put this week. Of the 27 economists polled over the last week by Reuters, 18 expect further easing on July 28-29. Only 5 economists think the BoJ will act this week.
Nomura Securities said fiasco from a Brexit referendum vote next week would push the yen up regardless of what the BoJ decides to do, so there is no point in weakening the yen this week
EU, ECB to discuss economic affairs, UK referendum
European Commission President Jean-Claude Juncker and Mario Draghi, president of the European Central Bank, are set to hold a meeting late Monday to discuss the bloc's economic affairs and the Brexit referendum.
The two presidents are to discuss deepening the EU's monetary union, said Mina Andreeva, a spokesperson at the Commission, the executive arm of the European Union (EU).
On the agenda are "other developments we might see in the weeks to come," Andreeva told a regular press briefing, signalling the referendum on Britain's EU membership as one of main topics.
Heads of EU institutions have met frequently in recent weeks to assess possible outcomes of the UK referendum. At Monday's meeting, Juncker and Draghi might discuss its economic impact, media reported.
The EU aims to complete its Economic and Monetary Union (EMU) by 2025 at the latest. The EMU represents a major step in the bloc's economic integration, which involves coordinating economic and fiscal policies, a common monetary policy, and a single currency.
Experts cautioned the bloc's economy was in a period of great uncertainty ahead of the UK referendum on June 23, when Britons will vote whether to leave the 28-country bloc or stay in the union.
Oil Prices Fall; U.S. Crude Stocks and Brexit in Focus
International oil benchmark Brent capped below $50 in early Asian trade Tuesday as investors stay risk-averse ahead of a referendum that could end Britain's membership in the European Union. Prices were also weighed by the prospect of bigger crude stocks in the U.S.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $48.45 a barrel at 0151 GMT, down $0.43 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.44 to $ 49.91 a barrel.
Moreover, uncertainty before three major central bank monetary policy meetings this week in the U.S., Japan and Britain, will likely weigh on investor sentiment.
"The Brexit issue is just a noise in the commodity space. It has brought down oil prices but we believe the supply and demand side of the oil market remains the main driver," said Barnabas Gan, an economist at OCBC.
Oil prices retreated overnight after data provider Genscape Inc. tipped a 525,000-barrel increase in U.S. crude stockpiles in the week ended June 10. Prices have been under pressure since Monday after industry group Baker Hughes reported the number of rigs drilling for oil in the U.S. rose for the second-straight week.
"The worry is that when prices reach $60 a barrel, we will see new investments in shale exploration," Mr. Gan added.
Reference: NASDAQ,Globaltimes,Barron’s Asia,MarketWatch
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