Yen weakens in Asia over Japan tax cut
AFPTOKYO--The yen weakened in Asia Thursday as traders got a confidence boost from a report that Japan may cut corporate taxes to offset an expected rise in VAT.
September 27, 2013, 12:08 am TWN
The dollar bought 98.92 yen in the afternoon, after briefly topping the 99-yen level at one point late in the morning. The unit was at 98.46 yen in New York late Wednesday.
The euro fetched 133.78 yen from 133.18 yen in U.S. trade. The single currency climbed above the 133.90 yen level earlier Thursday, while it bought US$1.3524, little changed from US$1.3522 in New York.
Japan's Kyodo news agency said Tokyo was considering a cut in the tax rate on firms to allay fears that the flagged rise in the sales levy — to 8.0 percent from 5.0 percent — would hurt the country's economic revival.
A dealer at a major Japanese bank told AFP that while the news is not new, the key thing is that the government would confirm that it is considering lowering business taxes.
The possible corporate tax cut is expected to come in a wider fiscal package that Prime Minister Shinzo Abe is set to unveil next week.
Adding to dollar-buying sentiment was speculation that Japan's national pension fund will move some of its mainly government bond portfolio into other, higher-risk assets such as stocks and currencies, dealers said.
The dollar was broadly weaker against other Asia-Pacific currencies.
It slipped to SG$1.2541 from SG$1.2567 the previous day and to 31.16 Thai baht from 31.41 baht.
It edged down to 43.31 Philippine pesos from 43.36 pesos, to 1,074.27 South Korean won from 1,077.94 won and to 62.20 Indian rupees from 62.63 rupees.
But it firmed to 11,470 Indonesian rupiah from 11,248 rupiah.
The Australian dollar edged up to 93.96 U.S. cents from 93.74 cents. The Chinese yuan changed hands at 16.16 yen compared with 16.13 yen.