The yen and the dollar advanced on speculation the global recession is deepening, spurring demand for the relative safety of the two currencies.
Japan’s currency rose to the strongest in two weeks against the euro as Asian shares dropped, prompting investors to cut holdings of higher-yielding assets. The yen also gained versus the greenback before U.S. reports that may show industrial output fell for a fifth month and manufacturing contracted. Nine of the 10 most-traded Asian currencies outside Japan weakened after China said foreign direct investment fell a sixth month.
“The markets are returning to reality from an exuberant state,” said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany’s second-biggest bank. “This is a correction which is leading to some buying of the yen. The dollar may be supported as the currency is likely to regain credibility.” read more
Japan’s currency rose to the strongest in two weeks against the euro as Asian shares dropped, prompting investors to cut holdings of higher-yielding assets. The yen also gained versus the greenback before U.S. reports that may show industrial output fell for a fifth month and manufacturing contracted. Nine of the 10 most-traded Asian currencies outside Japan weakened after China said foreign direct investment fell a sixth month.
“The markets are returning to reality from an exuberant state,” said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany’s second-biggest bank. “This is a correction which is leading to some buying of the yen. The dollar may be supported as the currency is likely to regain credibility.” read more
