China's minister cools yuan revalue talk (Agencies) Updated: 2005-05-06 09:06 The Japanese yen paused after a month-long rally
on Thursday as comments from China's finance minister dampened wild speculation
that Beijing was about to revalue its currency, the yuan.
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Financial Minister Jin Renqing answers question at a press
conference of the third plenary meeting of the 10th National People's
Congress on March 9, 2005.
[newsphoto] | Speaking on the sidelines of an Asian Development Bank meeting in Istanbul,
Chinese Finance Minister Jin Renqing said: "We will actively and prudently push
forward this reform but I believe under the current situation that speculation
on the renminbi (yuan) exchange rate is very hot, that pushing forward this
reform is very difficult."
The Japanese yen has gained alongside other Asian currencies in recent weeks
on growing speculations that China would relax controls on the yuan during this
week's Labour Day holidays and let the currency strengthen.
The yen hit a six-week high of 104.15 yen to the dollar on Wednesday but
eased after China's finance minister said intense speculation about yuan rise
was making it difficult for China to push forward on currency reform.
Financial analysts said China's reluctance to let speculators profit from any
currency change was well known and many were advising clients to stay with
bullish Asian currency positions for now.
"The comments from China may have dampened speculation of a yuan revaluation
over the Labour Day holiday but I think people will wait until this weekend
before taking positions off the table," said Paul Robson, currency strategist at
RBS Financial Markets.
The euro was a touch firmer against the dollar at $1.2970, extending gains
made earlier this week as traders bets that the US Federal Reserve could get
more aggressive in raising U.S. interest rates this year.
The U.S. central bank raised rates on Tuesday for an eighth consecutive time,
bringing its key lending rate to 3.0 percent.
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