The yen slid to a six-month low against the dollar and a four-year trough versus the euro on Monday as a deal on Iran's nuclear program eased political anxieties, buoying global equity markets. The Japanese currency typically falls when share prices rise, with the greater appetite for risk leading some investors to sell the low-yielding yen in search of greater return.
It has also weakened recently on the belief the Bank of Japan will implement the most aggressive monetary stimulus among major central banks.
"The market perceives the (inverse) correlation between the yen and the Japanese Nikkei as strong ... it's very much embedded in the market's psyche," said Jane Foley, senior currency strategist at Rabobank.
In early New York trade, the dollar was up 0.5 percent at 101.78 yen, having earlier hit 101.91 yen, its strongest since late May, as a deal between Iran and six world powers to curb Tehran's nuclear program lifted Asian and European shares and pushed oil prices lower.
The euro rose as far as 137.98 yen, its highest since October 2009. It was last up 0.2 percent at 137.48 yen.
The euro fell 0.4 percent to $1.3508, with analysts and traders also saying lower oil prices may exacerbate concern about disinflationary pressures in the euro zone.
Last week the euro fell as low as $1.3398 after a media report suggested the ECB could opt for negative deposit rates.
Comments
Comments are closed.