Monday, June 3, 2013

Is Dollar-Yen’s Slide Below 100 Just the Start?

The dollar-yen's fall below the key 100 mark could just be the start of a downtrend for the currency pair, analysts tell CNBC.  The dollar-yen fell as low as 98.86 on Monday on weak U.S. manufacturing data, down more than 4 percent from a four and half year high of 103.74 hit in May. On Tuesday the dollar-yen was trading around 99.

Ed Ponsi, managing director at Barchetta Capital Management, said yen weakness is losing momentum as support for recent moves by the Bank of Japan (BOJ) start showing "cracks." “What happened last week was the IMF [International Monetary Fund] basically pulled their support or encouragement away from Japan for their recent activities, saying that the yen perhaps had fallen too far, that's a complete 180 [degrees turn] from what the IMF said before," Ponsi told CNBC Asia's "Squawk Box."

He was referring to senior IMF official David Lipton's comments on Friday that the yen's depreciation since last year is below a level consistent with Japan's medium to long-term economic fundamentals….

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