The yen maintained losses as Group of Seven finance chiefs signaled they will tolerate the decline in the Japanese currency. U.S. stock futures fell.
The yen changed hands at 101.83 per dollar as of 8:49 a.m. in Sydney, after being quoted at as low as 102.21 at 4:22 a.m. A trade at that level would be the lowest October 2008. Standard & Poor’s 500 Index futures lost 0.3 percent after the measure closed at a record high last week.
While signaling acceptance of the yen’s decline through 100 per dollar, G-7 policy makers said they examined Japan’s strategy and they will monitor its impact on currencies. They reaffirmed their February commitment to “not target exchange rates” at a meeting in Aylesbury, near London, U.K. Chancellor of the Exchequer George Osborne told reporters May 11.
“Markets are prepared to back Japanese authorities’ attempt to reflate in terms of a weaker yen and expanding monetary base,” said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The export sector from Japan will be an obvious beneficiary of that.”
Many currency and option contracts exclude as triggers any quotes available before trading desks start in Australia and New Zealand, the first to open worldwide after the weekend.
An international code of practice prepared by ACI, a financial markets group founded in 1955, states that currency markets are officially open from 5 a.m. Monday in Sydney to 5 p.m. on Friday in New York, with trades at other times taking place “in conditions that are not considered to be normal market conditions or market hours,” according to the group’s website.