The yen and the dollar rose against the euro after U.S. regulators affirmed that the Bank of America Corp. will need more than $30 billion in new capital, spurring demand for refuge currencies.
The Japanese currency climbed against all major currencies for the first day since last week, when improved economic conditions around the world boosted the attractiveness of riskier assets. After a report reviewing American banks, their need for new capital made the investors to take a conservative step back towards refuge currencies, which favored the yen. The euro had the biggest fall against the Japanese currency, on growing speculations that interest rates will be cut in the Eurozone, which may follow other non orthodox measures to be taken as an attempt to stop the deepening recession in the European economic bloc.
After a week of optimism and rallies in high-yielding assets, some negative data coming from both North America and Europe brought the markets down this Wednesday. According to experts, the current global economic conditions still require a moderate level of risk aversion, since there is no solid evidence that the main world economies are «back on track». Traders taking profit from recent gains with the euro have also favored the yen.
EUR/JPY traded at 130.99 falling from 132.03, following the same movement, USD/JPY dropped from 98.85 to 98.44.
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