Yen Near Weakest in Eight Months After Crude Oil Prices Surge
June 14 (Bloomberg) -- The yen traded near its weakest in eight months in Asia after crude oil prices rose to a six-week high, raising concern energy costs will slow Japan's economy.
Japan yesterday cut its first-quarter economic growth estimate as sluggish overseas demand prompted manufacturers to keep inventories in check. The yen is down 6.3 percent this year in part on signs economic growth in Japan, which imports virtually all its petroleum, is trailing that of the U.S.
``Oil prices at this level do not give the yen any respite,'' said David Mozina, a currency strategist in Sydney at ABN Amro Holding NV. ``There's no reason to buy the yen.''
Against the dollar, the yen was at 109.52 at 8:39 a.m. in Tokyo, from 109.58 late yesterday in New York, according to electronic currency-dealing system EBS. It was also at 132.62 per euro, from 132.70. Japan's currency yesterday traded as low as 109.69 per dollar, the weakest since Oct. 14. The yen may fall to 110 per dollar this week, Mozina said.
Crude oil for July delivery yesterday rose 3.9 percent to $55.62 a barrel on the New York Mercantile Exchange, the highest close since April 6. Prices are up 45 percent from a year ago.
The world's second-biggest economy grew at an annual 4.9 percent pace, compared with a May 17 estimate of a 5.3 percent expansion, Japan's Cabinet Office said yesterday.
Associated Press
Update 3: Oil Prices Hover Above $55
06.13.2005, 11:21 PM
Crude prices remained firm above US$55 a barrel Tuesday after a key member of the Organization of Petroleum Exporting Countries said a production hike by the cartel would not cool overheated prices.
Light, sweet crude for the July contract fell 5 cents to US$55.57 a barrel on the New York Mercantile Exchange, midmorning in Singapore. On Monday, the benchmark commodity surged US$2.08 to settle at US$55.62 a barrel.
Heating oil prices rose to US$1.6690 a gallon (3.8 liters), while unleaded gas rose marginally to US$1.5610 a gallon.
Iran's Oil Minister Bijan Zanganeh said Monday that OPEC would not cool crude prices by raising output at its June 15 meeting in Vienna.
"Increasing oil production will have no influence on the conditions of the market," he said on the oil ministry's Web site.
Oil analyst Victor Shum of Texas-headquartered Purvin & Gertz in Singapore agreed, saying that a raise in the production output to 28 million barrels per day will only be a "symbolic gesture" by OPEC, since the cartel is already pumping that much.
Including Iraq, which is not bound by the official quota, OPEC's daily output was 29.3 million barrels a day in May, according to the International Energy Agency.
"The real supply is not going to be affected, so the pricing would not be significantly affected one way or another," Shum said.
OPEC, which accounts for 40 percent of global production, meets Wednesd
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