G-7 Meeting Likely Won't Alter Japanese Policy on the Yen
HONG KONG -- With currency intervention likely to come under fire at this weekend's meeting of the Group of Seven leading industrial nations, investors might be tempted to conclude that Japan won't buy dollars for yen over the next several days.
That would be a risky bet. The last time G-7 officials met, in May, the Bank of Japan spent ￥3.9 trillion ($33.56 billion) to hold back its currency in the days before and after the meeting. In February, the Bank of Japan started intervening on the Monday right after the Saturday on which G-7 meetings ended.
"The market should not get too confident" that Japan won't dabble Friday or early next week, says Marshall Gittler , a currency strategist at Deutsche Bank in Tokyo.
The level of the yen isn't important solely for currency traders. Foreign investors who have helped to make Tokyo one of the best performing stock markets this year also need to pay close attention.
The fortunes of companies they might buy -- particularly big exporters -- and the relative prices of the Japanese stocks compared with others rise and fall with the value of the yen.
To keep its exports competitive, Japan doesn't want the yen to get any stronger than about 115 to the dollar. If the rate strengthened to about 110, to pick a figure, Japan worries it will face more problems with deflation, after almost four years of falling prices, because imports become cheaper as the yen rises.
To try to stem the yen's rise against the dollar, Japan spent almost $80 billion in the first seven months of this year in market intervention. The Japanese central bank, after taking a breather in August, has again been intervening heavily in the markets this month, traders say.
And the pressure on the yen remains. At 115.76 to the dollar Thursday afternoon in Tokyo trading, the currency has strengthened notably from about 117.80 to the dollar during the past 10 days.
Strategists say 115 is the key level for the yen, because of the snowball effect that could develop if it took fewer than 115 yen to buy $1. Repeated interventions have convinced currency traders that Japanese policy makers have drawn a line in the sand at the 115 level.
Currency-market players have therefore set out to ensure maximum profits, and minimal losses, should that line be crossed. Because they have taken out so many options that depend on whether the 115 level is breached, protecting that level has become even more important to Japanese policy makers. Should they let the currency strengthen past 115 to the dollar, all those options would kick in and the yen's appreciation would accelerate dramatically, making any intervention to halt the strengthening that much tougher for the central bank.
"It is a lot less costly for the Japanese to intervene before [the yen strengths to] 115 and take the G-7 heat, rather than risk a fall below 115 and have to spend buckets to bring the yen back above," Steven Englander, a Barclay Capital Research currency strategist in New York wrote recently.
That state of affairs could leave investors who are confident the Japanese won't intervene caught short -- literally. When the dollar gets into a weakening pattern, as it has against the yen during the past 10 days, a classic investment strategy is to borrow dollars using yen and sell them, assuming it will be cheaper to buy back the dollars later.
Working to counter those who take up this strategy, which is known as short selling, makes it easier for the Bank of Japan to keep control over the yen. As the central bank buys the dollar, its price rises relative to the yen, sending short sellers rushing to buy the dollars they will need to pay back lenders, before those dollars get even more expensive. Such buying by short sellers helps strengthen the dollar even more, meaning the central bank doesn't have to work as hard.
G7会后日圆汇率将一切照旧
汇率干预行为很可能会成为此次7大工业国会议的众矢之的。投资者预计，今后数天内日本将有所收敛，暂停买入美元、卖出日圆的干预行动。
这将是一个危险的赌注。七大工业国官员上一次会晤是在5月份，日本央行(Bank of Japan)在会议前后的几天内花费了3.9万亿日圆（合335.6亿美元）来阻止日圆的升值。就在2月份七大工业国会议结束后的第二天（会议于周日结束），日本央行便入市干预。
德意志银行(Deutsche Bank)驻东京的货币策略师马歇尔?吉特尔(Marshall Gittler)称，市场不应过于相信日本周五或下周初不会干预市场。
日圆的汇率水平不仅仅对货币交易者来说非常重要，投资者东京股市的外国投资者也需要密切关注日圆汇价。他们为东京股市成为今年全球表现最佳的股市之一助了一臂之力。
日本公司的资产价值，特别是大型出口商的资产价值，以及日本股票相对于其他地区股票的相对价格都将随著日圆汇率的波动而上下起伏。
为了保持出口产品的竞争力，日本不希望美元/日圆汇率跌至115日圆水平之下。若日圆汇率走强至1美元兑110日圆左右，日本担心本国经济将面临更多的通货紧缩问题。在过去近四年中，由于进口商品随著日圆的上涨而变得廉价，日本国内物价持续下跌。
为了试图遏制日圆兑美元的升值，日本在今年的头7个月投入近800亿美元用于干预外汇市场。交易员称，在8月份稍作喘息后，日本央行本月再度大规模干预市场。
日圆面临的升值压力依然存在。到东京汇市周四后市美元兑日圆达到115.76日圆时，日圆兑美元在过去10天中从1美元兑大约117.80日圆左右大幅走强。
策略师称，115日圆对日圆来说至关重要，因为如果美元兑日圆跌破115日圆，将可能导致雪球效应。日本的一再干预已使货币交易者确信，115日圆已成为日本决策者的干预界限。
因此，货币市场人士已开始采取措施，确保在美元跌破115日圆后实现利润最大化，损失最小化。因为这些人士已参与了许多取决于115日圆水平是否被突破的期权，守住该水平对日本决策者来说已变得更加重要。若市场人士使得日圆走强并突破115日圆水平，所有这些期权将被执行，日圆的升值速度将急剧加快，从而使日本央行任何阻止日圆走强的干预行动变得更加困难。
Barclay Capital Research驻纽约的货币策略师史蒂文?英格兰德(Steven Englander)近期写道，在美元兑日圆走软至115日圆和在七大工业国会议上遭受抨击之前干预市场要比在汇率跌破115日圆后再花费巨资推高汇率代价小得多。
当前的形势可能使坚信日本不会干预市场的投资者选择卖空美元/日圆。当美元步入走软形态时（就像过去10天美元兑日圆的走势那样），典型的投资策略是利用手中的日圆借入美元，并卖出这些美元，并预期将来能以更低的价格买回美元。
通过采用与上述策略、即卖空相反的操作，日本央行更容易控制日圆汇率。日本央行买入美元，推动美元兑日圆上涨，这导致卖空者在美元价位变得更高之前争相买入美元，以偿还当初借入的美元。卖空者的这类买盘帮助美元进一步走强，这意味著央行的干预不必费很大的劲。
