Tradervox.com (Dublin) – The yen has strengthened the most in six weeks against the euro as signs of global economic slowdown emerged underpinning the demand for the safety of the yen. The US dollar, the other safe haven currency, also appreciated against all the 16 major currencies except one after the central bank of South Korea reduced its interest rates against the market expectation leading to a decline in European and Asian stocks across the board. In addition the Australian dollar dropped momentarily to three weeks low after a report showed reduced payrolls in June. After the Bank of Japan seemed to bolster asset purchases fund, the yen dropped momentarily, this was reversed after economists dismissed the move as technical adjustment that would does not amount to additional stimulus.
According to Ian Stannard, the Chief European Currency strategist in London at Morgan Stanley noted that there are increased negative signals which are generated by the leading indicators signaling an increased level of economic slowdown. Such indictors will only make the yen stronger as the market searches for safety. The BOJ made a technical move by moving 5 trillion yen from its credit loan facility to add to its asset purchases fund which it intends to use in buying short term public debt as opposed to long-term government bonds which has been its tradition.
The search for safe haven currency was also triggered by the Bank of Korea’s decision to lower its interest rates to 3 percent. The yen increased prior to report expected to show Chinese gross domestic product expansion slowed to 7.7 percent in the last quarter from the previous reading of 8.1 percent. In the last quarter the yen has increased by 6.9 percent making it the best performer among the 10 most traded currencies. The dollar increased by 4.6 percent while the euro was among the worst performers, dropping by 3.9 percent.
The Japanese currency increased by 0.7 percent against the euro to trade at 96.93 per euro; it had earlier appreciated to 96.76 the strongest it has been since June 1. The Japanese currency also increased by 0.5 percent against the dollar to trade at 79.33.
According to Ian Stannard, the Chief European Currency strategist in London at Morgan Stanley noted that there are increased negative signals which are generated by the leading indicators signaling an increased level of economic slowdown. Such indictors will only make the yen stronger as the market searches for safety. The BOJ made a technical move by moving 5 trillion yen from its credit loan facility to add to its asset purchases fund which it intends to use in buying short term public debt as opposed to long-term government bonds which has been its tradition.
The search for safe haven currency was also triggered by the Bank of Korea’s decision to lower its interest rates to 3 percent. The yen increased prior to report expected to show Chinese gross domestic product expansion slowed to 7.7 percent in the last quarter from the previous reading of 8.1 percent. In the last quarter the yen has increased by 6.9 percent making it the best performer among the 10 most traded currencies. The dollar increased by 4.6 percent while the euro was among the worst performers, dropping by 3.9 percent.
The Japanese currency increased by 0.7 percent against the euro to trade at 96.93 per euro; it had earlier appreciated to 96.76 the strongest it has been since June 1. The Japanese currency also increased by 0.5 percent against the dollar to trade at 79.33.
