The yen declined 0.8 per cent to 82.30 per dollar in early New York trading. REUTERS / Truth Leem
The yen declined 0.8 per cent to 82.30 per dollar in early New York trading. REUTERS / Truth Leem
The yen declined 0.8 per cent to 82.30 per dollar in early New York trading. REUTERS / Truth Leem
The yen declined 0.8 per cent to 82.30 per dollar in early New York trading. REUTERS / Truth Leem

Business

Yen and euro both yield ground to dollar

What's Down: The yen weakened beyond 82 to the US dollar for the first time since April after Japan's exports decreased for a fifth straight month.

Bloomberg News

November 22, 2012

  • English
  • Arabic

The yen weakened beyond 82 to the US dollar for the first time since April after Japan's exports decreased for a fifth straight month, undermining demand for the nation's assets.

The Japanese currency fell to a six-month low versus the euro amid speculation that the winner of next month's election will pressure the Bank of Japan to boost monetary stimulus.

The European single currency fell from the highest level in almost two weeks versus the dollar after finance ministers failed to agree on a debt-reduction package for Greece. The Dollar Index approached an 11-week high amid stronger demand for the safest assets. Sweden's krona advanced against all of its major peers.

"The trade numbers have added to the case for yen weakness," said Sean Callow, a senior currency strategist at Westpac Banking in Sydney.

"The struggles of the Japanese exporters are becoming increasingly clear."

The yen declined 0.8 per cent to 82.30 per dollar in early New York trading, after reaching 82.38, the weakest since April 6.

Japan's currency dropped 0.6 per cent to 105.33 per euro, after touching 105.55, the lowest level since May 4. Europe's shared currency fell 0.1 per cent to $1.28. It rose to $1.283 yesterday, the most since November 7.

The yen slid for a sixth day versus the dollar after the finance ministry said exports fell 6.5 per cent last month from a year earlier, leaving a trade deficit of ¥549 billion.

The median estimate of economists surveyed by Bloomberg was for a shortfall of ¥360bn.

The 14-day relative strength index for the dollar against the yen was above 70 for a fourth day, the level that some traders see as a sign an asset is about to change direction.

"Dollar-yen and cross-yen look overbought," said Yoshitsugu Fujita, the assistant vice president of global markets at Sumitomo Mitsui Trust Bank in New York.

"The weak yen trend will reverse in the not-so-distant future."

The biog

Hobbies: Salsa dancing “It's in my blood” and listening to music in different languages

Favourite place to travel to: “Thailand, as it's gorgeous, food is delicious, their massages are to die for!”  

Favourite food: “I'm a vegetarian, so I can't get enough of salad.”

Favourite film:  “I love watching documentaries, and am fascinated by nature, animals, human anatomy. I love watching to learn!”

Best spot in the UAE: “I fell in love with Fujairah and anywhere outside the big cities, where I can get some peace and get a break from the busy lifestyle”

While you're here
While you're here
Cultural fiesta

What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421,  Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day. 

MATCH INFO

England 2
Cahill (3'), Kane (39')

Nigeria 1
Iwobi (47')

If you go:
The flights: Etihad, Emirates, British Airways and Virgin all fly from the UAE to London from Dh2,700 return, including taxes
The tours: The Tour for Muggles usually runs several times a day, lasts about two-and-a-half hours and costs £14 (Dh67)
Harry Potter and the Cursed Child is on now at the Palace Theatre. Tickets need booking significantly in advance
Entrance to the Harry Potter exhibition at the House of MinaLima is free
The hotel: The grand, 1909-built Strand Palace Hotel is in a handy location near the Theatre District and several of the key Harry Potter filming and inspiration sites. The family rooms are spacious, with sofa beds that can accommodate children, and wooden shutters that keep out the light at night. Rooms cost from £170 (Dh808).

Towering concerns
Men's football draw

Group A: UAE, Spain, South Africa, Jamaica

Group B: Bangladesh, Serbia, Korea

Group C: Bharat, Denmark, Kenya, USA

Group D: Oman, Austria, Rwanda

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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