Dollar And Yen Surges Up On Weak Asian Stocks

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The US dollar and the Japanese yen spiked higher against most major rivals on Thursday morning in Asia as most Asian stocks tumbled on renewed concerns about the euro-zone debt worries.

However, both currencies tumbled against the Swiss franc due to across the board rallying of the latter.

The yen and dollar typically strengthens in times of stock market slide as investors consider them as safe-haven.

Despite improved business sentiment, the Japanese stock market opened sharply lower today as investors went on a selling spree across the board following a highly negative close on Wall Street on the back of a disappointing private sector jobs report and a possible rating downgrade on Spain.

As stocks declined sharply, the benchmark Nikkei 225 index plunged to a new 7-month low to 9,218.4. The Nikkei is currently trading at 9,200, down 182.6 points or 1.95% from its previous close.

Among other markets in the Asia-Pacific region, Australia, New Zealand, Singapore and South Korea are trading notably lower. Shanghai, Malaysia and Taiwan are also trading weak. The stock markets in Hong Kong and Thailand are closed today.

Moody's said yesterday that it has put Spain's AAA local and foreign currency government bond ratings on review for possible downgrade.

The ratings agency said its decision was prompted by the country's deteriorating economic growth prospects, the challenges the government faces in achieving its fiscal targets and concerns over the impact of rising funding costs over the medium term.

"If at the conclusion of the review, Spain's ratings are lowered, it would most likely be by one, or at most two, notches," Moody's said in a statement.

In economic news, the Bank of Japan's quarterly Tankan survey showed that the large manufacturers' index hit its highest figure in two years in the second quarter of 2010, breaking into positive territory with a score of 1.

That was well above forecasts for a score of minus 7 after showing minus 14 in the first quarter. The outlook projected a score of 3 for the third quarter, again topping forecasts for a score of 1 after coming in at minus 8 in the previous three months.

The yen jumped to more than a 3-week high of 131.47 against the pound around 10:35 pm ET and this may be compared to Wednesday's New York session close of 132.21. On the upside, the yen may find resistance around the 129.90 level. The pound-yen pair is presently quoted at 131.56.

Against the US dollar, the yen climbed to an 8-week high of 88.12 around 10:30 pm ET and a move above the 88.0 resistance level could set the strongest level for the domestic unit in 2010. The greenback-yen pair that was worth 88.45 at Wednesday's North American close is currently quoted at 88.16.

U.S. private sector employment increased by much less than expected in June, according to the monthly jobs report from payroll processor ADP.

ADP said that non-farm private employment increased by 13,000 jobs in June following an upwardly revised increase of 57,000 jobs in May. Economists had expected an increase of about 61,000 jobs compared to the addition of 55,000 jobs originally reported for the previous month.

Against the euro, the yen rose to a 2-day high of 107.53 around 10:00 pm ET and is approaching Tuesday's new multi-year high of 107.33. The euro-yen pair that closed yesterday's deals at 108.24 is presently quoted at 107.70.

The yen jumped to more than a 5-week high of 73.36 against the Australian dollar and 82.60 against the Canadian dollar around 10:15 pm ET, compared to yesterday's closing quotes of 74.37 and 83.16, respectively. On the upside, the yen may find target levels at 70.60 against the aussie and 82.0 versus the loonie.

The Australian Bureau of Statistics said retail sales were up a seasonally adjusted 0.2% month-on-month in May to A$20.16 billion. This was slightly worse than expectations for a 0.3% increase and slower than the 0.6% rise in the previous month. Retail sales had risen 0.8% in March.

Against the NZ dollar, the yen climbed to more than a 3-week high of 60.0 around 10:00 pm ET and this may be compared to Wednesday's New York session closing quote of 60.59. The kiwi-yen pair is presently worth 60.21 with 58.70 seen as the next likely target level.

On the flip side, the yen fell to a 3-day low of 82.51 against the Swiss franc by 9:05 pm ET due to across the board rallying of the latter. Thereafter, the yen reversed its course against the franc and the pair is presently quoted at 82.26. The franc-yen pair closed yesterday's deals at 82.12.

The US dollar rose to a 6-day high of 1.4916 against the pound around 10:00 pm ET, compared to 1.4947 hit late New York Wednesday. The cable is presently worth 1.4936 with 1.4860 seen as the next possible target level.

The greenback also edged higher against the euro in the session, rising to as high as 1.2194 around 9:25 pm ET. The euro-buck pair that closed yesterday's deals at 1.2239 is presently quoted at 1.2221.

Against the Swiss franc, the US currency plunged to more than a 2-month low of 1.0712 around 10:20 pm ET and the next likely support level for the pair is seen at 1.0620. The greenback-franc pair that finished Wednesday's deals at 1.0776 is presently quoted at 1.0723.

Looking ahead, German retail sales and French PPI for May and the PMI data from the major euro-zone economies are expected to influence markets in the upcoming European session.

Turning to the U.S., data on jobless claims, national manufacturing activity, construction spending and pending home sales are likely to drive market movement in the North American session. (Provided by RTTNews)

New Zealand GDP Expands For 4th Straight Quarter

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Economic activity in New Zealand expanded by 0.6 percent in the March 2010 quarter, according to data released Thursday by Statistics NZ.

The agency also reported that GDP increased 1.9 percent for the full year to March 2010.

The New Zealand economy has now experienced for successive quarters of economic growth.

The GDP growth was in line with the estimate of most economists.

Statistics NZ said manufacturing activity was up 1.6 percent on quarter, wholesale trade expanded 1.4 percent, forestry/logging was up 5.3 percent and communications services declined 2.0 percent.

The full year GDP growth compared to a 3.1 percent contraction for the year to March 2009.

Statistics NZ said Household consumption expenditure, which measures the volume of goods and services purchased by New Zealand households, was up 0.2 percent this quarter. "An increase in the volume of durable goods purchased by households (furniture and major appliances, used cars, and clothing) was partly offset by lower volumes of non-durable goods (food and petrol), and services this quarter," Statistics NZ said.

Central government expenditure was up 1.9 per cent in the March 2010 quarter. During the March 2010 quarter the government accepted delivery of the $93 million offshore patrol vessel. Without the purchase of this ship, central government expenditure would have been up 0.8 per cent, the agency said. (Provided by RTTNews)