Wednesday, September 15, 2010

Ringgit weakens vs US$ after Japan caps yen rise

KUALA LUMPUR: The ringgit weakened against the US dollar in late morning trade on Wednesday, Sept 15 after Japan intervened for the first time in six years to cap the yen's rise.

At 12.15pm, the ringgit was at 3.1185 to US dollar, weakening from 3.1065 overnight.

News reports said Japan's intervention stoked speculation other Asian central banks will also step in to protect their exporters by halting rallies in their currencies.

Reuters reported Japan's intervention was to stem a rise that is threatening a'' fragile economic recovery.

The dollar extended its gains after intermittent yen selling and was up 2 percent'' on the day and nearly two yen above a 15-year low. But it was unclear whether Prime Minister Naoto Kan's government had the stomach for a prolonged campaign'' similar to Japan's last foray into foreign exchange markets in 2003-2004.

Finance Minister Yoshihiko Noda confirmed the intervention, saying Tokyo was also'' communicating with authorities overseas but indicating that Japan acted alone.

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