2013.04.1102:58:56UTC+00Yen halts drop toward 100 as Japanese merchandise offshore bonds

The yen halted a decline that took it to within 0.1 percent of 100 per dollar, after official data displayed Japanese investors merchandise foreign bonds.

The yen advance againsts 15 of 16 major counterparts as a technical indicator signaled the currency may pare its 6.6 percent decline versus the dollar since the Bank of Japan (8301) broaden financial easing on April 4. South Korea’s won advance for a third day after the nation’s central bank kept its key rate unaltered. Australia’s dollar dropped after the statistics bureau stated the nation’s jobless rate unexpectedly boost in March.

“It is quite a surprise to see that Japanese investors were net sellers of foreign bonds,” Sebastien Galy, a foreign- exchange strategist at Societe Generale SA in New York, said in an emailed response to questions. “The yen’s gains today could be a factor of that negative surprise.”

The yen improved 0.2 percent to 99.57 per dollar at 10:54 a.m. in Tokyo after yesterday hitting 99.88, the weakest since April 14, 2009. Japan’s currency advanced 0.3 percent to 130.01 per euro after yesterday declining as low as 130.54, the least since January 2010. The euro skidded 0.1 percent to $1.3056. The won powered up 0.5 percent to 1,130.43 per dollar.

Japanese investors were net merchandisers of foreign credit in the week ended April 5, according to data published by the Ministry of Finance. They sold 1.14 trillion yen ($11.4 billion) in overseas bonds and notes, bought 6.3 billion yen in overseas stocks and purchased 75.5 billion yen in overseas short-term securities.

The 14-day relative strength index of the yen against the dollar was at 28.3, under the 30 level that some traders use as a signal that a currency has collapsed too far, too fast. Against the euro, the yen’s RSI was at 29.5.

“There’s certainly some interest in the market to take profit on short yen positions, which is providing pause in the general yen depreciation trend,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington.

Japan’s currency has gave up 4.2 percent in the past week, the worst move among 10 developed nation currencies tracked by Bloomberg Correlation Weighted Indexes.

The Australian currency loses its stability against the dollar and yen after the statistics bureau announced the unemployment rate boost to 5.6 percent and employers lay off 36,100 jobs in March. Economists surveyed by Bloomberg News had forecasted the unemployment rate would remain unmoved at 5.4 percent.

The Aussie declined 0.4 percent to 104.77 yen and exchanged 0.2 percent lesser at $1.0521 after yesterday reaching $1.0552, the most since Jan. 24.