US Dollar Hitting Record Highs, Yen Weakens Propelling The Nikkei Higher

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Published: Nov 24, 2016, 09:14 UTC

This morning the Japanese yen weakened sending the Japanese stock bourse, the Nikkei, higher as the rest of Asia and the Pacific Rim traded mostly flat to

This morning the Japanese yen weakened sending the Japanese stock bourse, the Nikkei, higher as the rest of Asia and the Pacific Rim traded mostly flat to lower. Japanese financial markets were shuttered yesterday for a public holiday and today, in the United States, financial markets will be closed for the Thanksgiving Day holiday.

The benchmark stock bourse, the Nikkei 225 was up nearly one percent, at the time of this report with the Topix up 0.86 percent. In South Korea, the Kospi Composite Index is down 0.84 percent and in Hong Kong, stocks were also down half a percent. The stock exchanges on mainland China were trading slightly higher this morning.

In Australia, the S&P ASX 200 reversed early gains to close flat on the day at 5,481.30. The heavily weighted financial sub-sector rose 0.25 percent while the energy and material sub-sectors both fell. Shares of Boral, a construction and material business tumbled 11.92 percent after announcing they would buy the US based Headwaters for $2.6 billion.

Turning our attention to the Forex markets this morning, the US Dollar index rose during US trading hours after the release of November’s Federal Reserve’s meeting minutes. The minutes backed the consensus view of a rate hike in December. This morning the Dollar index moved up from Wednesday’s 101.02 to 101.88. This is a level not seen since 2003.

This morning, the yen weakened further in the USD/JPY Forex market moving up to 113.24. Yesterday the yen was near 111.05 and last week the yen was below ¥110. This pushed exporting plays higher as Toyota climbed 3.3 percent, Nissan was up 2.2 percent and Honda Motor closed up over three percent. Shares of the electronic giant Panasonic rose over 2.2 percent.

This morning the euro fell to 1.0530 from levels above $1.06. The British Pound is at 1.2430. The Chinese yuan’s mid-point was set at 6.9085, its weakest level since June 10, 2008. The People’s Bank of China allows the yuan to float two percent around this daily fix.