Yen climbs broadly in London

The yen climbed broadly on Wednesday as the recent optimism on the global economy continued to dissipate, prompting investors to shun perceived riskier assets as stock markets fell. The dollar also gained against currencies such as the Australian dollar and sterling, which typically fall in times of heightened risk aversion.
The euro was steady against the greenback, however, edging periodically into positive territory after data showed German industrial output rose by 3.7 percent during May, more than forecast and the strongest gain since August 1993. The euro fell to 130.43 yen, its lowest since May 22. By 1147 GMT, it was down 0.6 percent at 131.21 yen.
The dollar lost 0.6 percent to 94.33 yen, having also hit its lowest since May 22 at 94.09 yen, according to Reuters data. The euro was steady against the dollar at $1.3910, having briefly risen to a session high of $1.3938 following the better-than-expected German data. The dollar index was also steady at 80.713.
Recovery doubts have helped pull currencies such as the Australian dollar, sterling and the euro well off peaks hit in June, and the dollar and yen have risen in the past few weeks. "There is very little clarity on the global outlook, and there is uncertainty over the earnings season," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
The second quarter US earnings season kicks off with results from Alcoa Inc later in the day. Investors are also wary ahead of a summit of leaders of the G8 economic powers in Italy, who meet later on Wednesday and on Thursday, where they will be watching for any comment in the debate on the dollar's role as the world's reserve currency.
The Australian dollar fell by 0.5 percent to $0.7854 and hit a six-week low against the yen, shrugging off data earlier on Wednesday showing a surge in Australian consumer confidence. Sterling also hit a one-month low against the dollar, continuing to fall following weak UK industrial production data on Tuesday and on concerns the Bank of England may expand asset purchases under its quantitative easing programme. Traders and analysts said the current phase of risk aversion is unlikely to last, however.