Rand to gain on bond sales: Okasan Securities

ANALYSTS' VIEW

The rand may gain 12.3 per cent against the yen after a three-fold increase in issuance of South African bonds to Japanese investors, said Okasan Securities Co, the leading underwriter of such sales.

The currency has risen 4.1 per cent versus the yen in 2007 as the difference in yield between two-year South African and Japanese bonds widened to a three-year high of 8.462 percentage points.

Sales of rand Uridashi bonds, local currency debt sold to individual investors in Japan, climbed 248 per cent to $652.9 million in the first half from a year earlier, according to data compiled by Bloomberg. "Japan's elderly and housewives are investing in securities denominated in high-yielding currencies such as the rand," said Tsutomu Soma, a dealer in Tokyo at Okasan, Japan's seventh-largest brokerage. "The bias is for a weaker yen against the rand."

Canadian $ may extend to 17-yr high: Nomura

The Canadian dollar may extend a rally to a 17-year high of ¥120 this quarter as a strengthening economy and rising interest rates attract investment, said Takahisa Odaka at Nomura Securities Co.

The Bank of Canada will lift the overnight rate by a quarter percentage point to 4.5 per cent today, increasing the appeal of the nation's assets, according to all but one of 29 economists surveyed by Bloomberg News.

Commodity demand from China and other nations helped drive Canada's dollar to the highest since 1977 against the US currency last week. Raw materials make up more than half of the nation's exports. "The Canadian dollar is soaring and going where it has not gone before," said Odaka, an economist and currency analyst in Tokyo at Japan's largest brokerage.

"The currency is supported by prospects of higher rates." Canada's dollar, which has strengthened 15.6 per cent against the yen and 11.3 per cent against the US currency this year, rose to ¥118.10 and to 95.52 US cents at 6:31 a.m. in London ($1=C$1.0468). Canada's currency may climb to ¥120 and C$1.03 against the dollar by the end of September, Odaka said.

$ may rise to 4 1/2 year high of ¥125: Shinko

The dollar may rise to a 4 1/2-year high of ¥125 next week should it sustain gains above 123.67, said Kengo Suzuki, currency strategist at Shinko Securities Co in Tokyo, citing the technical analysis of its price chart.

The level of ¥123.67 is a parabolic stop and reversal point. A rise above this price signals traders should close bets for dollar weakness.

The parabolic system, which is similar to a moving average in that it follows a security's price movement in the form of a parabolic shaped dotted line, has been above the dollar-yen's price for the past nine days.

The dollar's rise above the parabolic line would signal further gains against the yen. The width between the dollar's upper and lower Bollinger band is narrowing, suggesting the currency will prolong its rally started July 3. Bollinger bands are two standard deviations above and below the average price of a currency or security over the past 20 days.