John Butler An Opalesque column for global macro investors.
Benedicte Gravrand, Opalesque Geneva:
There was some confusion earlier this week on the message the G7 wanted to convey on foreign exchange rates after their meeting. As there was no mention of the yen, the markets continued speculating and the yen further depreciated. The G7 subsequently issued another statement saying, "The G7 statement signalled concern about excess moves in the yen. The G7 is concerned about unilateral guidance on the yen. Japan will be in the spotlight at the G20 in Moscow this weekend." The yen rallied after the statement.
"Rather than calm the markets, the poorly communicated statement has significantly raised volatility," Richard Gilhooly, fixed-income strategist at TD Securities in New York, told Reuters. The yen went from 78 to a dollar in early October 2012 to 92.88 yesterday, after peaking to 94.32 on Monday (11 February, 2013).
G20 finance ministers and central bankers are meeting in Moscow today and tomorrow (15/16 Feb - the main summit will take place in September). Bank of Canadaís chief Mark Carney said the G7 (the U.S., Britain, France, Germany, Japan, Canada and Italy) should, during the G20 meeting, urge developing countries to adopt flexible exchange rates ......................
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