The yen hit its highest levels in more than six weeks against the dollar and euro on Wednesday as traders bet that a recent pullback in risk assets could provide the impetus for a further rise in the Japanese currency. Sterling hit a one-month low against the dollar after weak industrial output data the previous day reinforced doubts about a UK recovery.
The dollar had fallen broadly since March, as hopes grew that the worst of the global economic recession was over, boosting risk appetite and prompting investors to shift funds out of the safe-haven dollar into other currencies and assets.
But in recent weeks, market players have started to fret that optimism about the global economy's recovery prospects and the rally in risk assets may have been overdone. Such doubts have helped pull currencies such as the Australian dollar, sterling, and the euro off peaks hit in June, and the dollar and the yen have risen in the past few weeks.
Currencies such as the euro and sterling extended their falls against the yen on Wednesday, as short-term traders latched on to the theme of risk reduction, said a trader for a major Japanese bank. The euro fell 0.7 percent to 131.15 yen. Earlier, the euro fell to as low as 130.96 yen, its lowest since late May.
The yen rose broadly, with the dollar hitting a six-week low of 94.15 yen on trading platform EBS. Traders said speculators sold dollars to try to push it down along with cross/yen and the Nikkei share average's 2 percent drop. Against the Japanese currency, sterling also reached its lowest in more than a month of around 151.50 yen.
Comments
Comments are closed.