Yen rallies as investors seek a safe haven - Emirates24|7

Yen rallies as investors seek a safe haven

The yen rose against the euro and the dollar as Asian stocks slumped on concern the United States Government's bank-rescue plan will fail to revive lending, boosting demand for Japan's currency as a haven.

The yen also gained against higher-yielding currencies such as South Korea's won and Sweden's krona.

The yen rose 0.3 per cent to 116.54 per euro in London after appreciating 1.8 per cent, the first advance in four days. It climbed for a third day against the greenback, rising to 90.10 yen from 90.47. The dollar was little changed at $1.2935 per euro, after gaining 0.7 per cent.

The yen climbed 1.2 per cent to 15.47259 against the won and 0.4 per cent to 10.928 versus the krona. Implied volatility on one-month euro-yen options rose to 26.5 per cent from 26.2 per cent. The step, which indicates the risk of exchange-rate fluctuations that can erode profit on so-called carry trades, was 13.9 per cent a year ago.

Currency movements may be volatile in Asia as a national holiday in Japan reduces liquidity, said Alex Sinton, a senior currency dealer at ANZ National Bank in Auckland.

The euro may weaken versus the dollar before a report tomorrow that economists say will show European industrial production dropped the most in almost 23 years.

The euro fell for a second day against the yen on concern the financial turmoil in Europe will worsen.

 

Comments

Comments