Despite Softer Yen, Exporters Fall


NEW YORK (TheStreet) -- Japan's currency was retreating from an earthquake-induced surge Friday, but Japanese exporters remained pressured Monday morning.

The U.K. pound was trading 0.3% higher at 132.053 yen and the euro was up 0.4% at 114.294 yen as Japan's central bank pumped the money markets with 15 trillion yen, or $183 billion, and ramped up its bond buying program in efforts to maintain financial stability in the wake of the biggest earthquake to hit the country.

The central bank left interest rates unchanged at zero to 0.1%.

The euro gained as eurozone leaders enlarged their bailout fund for the troubled region and lowered the borrowing rates on rescue loans to Greece over the weekend.

Still, "the advance could be short-lived as market sentiment remains battered by the uncertainties surrounding the global economy," warned Daily Forex analyst David Song in a report.

UBS currency strategist Geoffrey Yu said the Eurozone leaders are moving in the right direction, but thinks their measures haven't been comprehensive enough. "This leaves the euro still vulnerable to policy disappointment."

Although the Japanese yen weakened, pressure continues for Japanese exporters, as investors worried about the impact of the earthquake on the companies' operations and future growth.

Toyota ( TM) was tumbling 4.7% to $81.66 and Honda ( HMC) was falling 3.7% to $38.27 as the automakers shut down plants in Japan.

Digital device maker Canon ( CAJ) was falling 4.3% to $43.55 and Sony ( SNE) was lower by 7.3% to $31. Electronics maker Panasonic ( PC) tumbled 5% to $12.09.

Electronics company Hitachi ( HIT) was tanking 15.5% to $49.96.

"Japan was as well-prepared as might be expected for a devastating earthquake and tsunami from a building code and search-and-rescue perspective," Luminous Capital partner Alan Zafran said in a report. "However, it fails the test when examining how prepared its fiscal condition is to deal with an event that will further tax its debt-serving capability. Watch for potential Japanese government debt downgrades."

Although the yen had weakened Monday, "long yen positions are now considerable, and growing," UBS strategist Gareth Berry said in a report; this explains why the U.S. dollar-yen pair has failed to rally towards 85 yen. The U.S. dollar was down 0.3% at 81.661 yen Monday afternoon. "Selling USDJPY was a popular trade all week," while asset managers, hedge funds, corporates and private clients were all net buyers of the yen for the first time since October, Berry said.

>>Search for Highest Dividends by Rate or Yield
More on Earnings
Today's Top Earnings
Earnings Calendar

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

>To follow the writer on Twitter, go to Andrea Tse.

>To submit a news tip, send an email to: tips@thestreet.com.

RELATED STORIES:

Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

More from Currencies

Bank of England Holds Rates Steady, But Vote Shift Signals Hawkish Tone

Bank of England Holds Rates Steady, But Vote Shift Signals Hawkish Tone

Bitcoin Today: Prices Close to Flat in Low-Volume Trading

Bitcoin Today: Prices Close to Flat in Low-Volume Trading

Markets Wobble as U.S. Readies More China Tariffs

Markets Wobble as U.S. Readies More China Tariffs

Watch These Two Crypto Experts Fiercely Debate the Future of Regulation

Watch These Two Crypto Experts Fiercely Debate the Future of Regulation

Bitcoin Today: Prices Attempt to Rally Following Early Weakness

Bitcoin Today: Prices Attempt to Rally Following Early Weakness