Abe adviser Koichi Hamada: Fair yen value at 100 per dollar

In an interview with Reuters, Koichi Hamada, a retired Yale University professor and since December 2012 one of Japan PM Shinzo Abe's advisers, said the Japanese yen was appropriately valued against the US dollar at levels around ¥100. Mr Hamada had already voiced this opinion in March, despite the Japanese government having asked him at the time to stay clear of such public announcements. He further told Reuters that the Bank of Japan had a lot of room for further easing, if necessary. It is hard to imagine that Mr Hamada made these remarks on behalf of the BoJ's Mr Kuroda or prime minister Mr Abe, both of whom would certainly want to avoid further exchange rate targeting for the time being, as official hints at more future interventions could draw Japan deeper into "beggar thy neighbour" arguments with its Asian trade partners. Be that as it may, currency traders took notice of Mr Hamada's comments and interpreted the USD/JPY rate of ¥100 as a temporary ceiling. As of this writing, USD/JPY is trading at ¥99.2, roughly 0.2 percent below yesterday's level after profit-taking.

Moving to Europe and the United States, both EUR/USD and GBP/USD advanced further. EUR/USD is currently at $1.3091 (+0.65%) and cable trades at $1.5332 (+0.5%), after stronger than expected UK industrial and manufacturing production numbers and Federal Reserve chairman Ben Bernanke's signals from last night that the Fed was unlikely to quit its asset purchases anytime soon.

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