The Yen declines against the Dollar and majors on bad unemployment data

The Yen fell against the Dollar on today’s bad unemployment data that came out worse than expected also on concern a Bank of Japan report tomorrow will show business confidence slumped. The Yen dropped against the Euro after the Japanese jobless report which saw traders selling the yen, however speculation that the ECB may still cut rates will make investors reluctant to hold onto their short positions. “The Tankan is going to be terrible and it’ll be very yen negative as market participants won’t regard the yen as a safe haven anymore,” said Toru Umemoto, a chief currency strategist based in Tokyo at Barclays Capital, a unit of the third-biggest U.K. bank. “The Tankan is going to be terrible and it’ll be very yen negative as market participants won’t regard the yen as a safe haven anymore,” said Toru Umemoto, a chief currency strategist based in Tokyo at Barclays Capital, a unit of the third-biggest U.K. bank. The USD/JPY is currently trading at 98.15 as of 8:30am, GMT.

Sterling fell against the dollar on Monday as U.S. auto sector trouble and banking sector concerns made investors risk aversion, benefitting the dollar to the detriment of currencies perceived as higher risk. Sterling is typically vulnerable to equity market falls and heightened risk aversion, which left it among the biggest fallers of the major currencies as it failed to benefit from data showing an encouraging rise in UK mortgage approvals. However the British pound looks to have corrected somewhat against the Dollar ahead of the G20 summit in London. "Overall, sterling is one of the main currencies at risk among the majors, given its particular sensitivity to equity markets," BNP Paribas currency analyst Ian Stannard. The GBP/USD is currently trading at $1.4285 as of 8:45am, GMT.

The Australian dollar headed for a loss as concern the global recession is deepening reduced demand for higher yielding assets. The currency gained today as local stocks performed better than U.S. equities yesterday, encouraging some investors. “Europe will be a continued focus with worries about their fiscal, economic and banking problems and there appears to be a clear end-game for the U.S. auto sector with a much greater chance of them moving into Chapter 11,” said Tony Morriss, a senior markets strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “People are taking risk off the table.” The AUD/USD is currently trading at 0.6890 as of 9:08am, GMT.

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