The JPY rises against the Euro as Asian stocks slide and investor look for a hav

The JPY rose against the euro as Asian stocks plummeted on concernthe global recession will be prolonged, spurring demand for therelative safety of Japan’s currency. The JPY gained against all 16most-traded currencies before a U.S. report tomorrow that economistssay will show durable-goods orders declined in May. The Japanesecurrency also gained for a third day against the dollar after the WorldBank yesterday forecast the global recession will be deeper than itearlier projected. “Worries that the ‘green shoots’ of the globalrecovery are unlikely to be sustainable may make investors riskaverse,” said Hideki Amikura, deputy general manager of foreignexchange in Tokyo at Nomura Trust and Banking Co., a unit of Japan’slargest brokerage. “This will probably lead to yen strength.” TheEUR/JPY is currently trading at 132.35 as of 9:00am, London Time.

Canada’s dollar the loonie fell against its U.S. counterpart onspeculation recovery from the first global recession since World War IIwill take longer than some forecast. “There’s a little bit more focuson the fact that the green shoots are just that, we haven’t seen thegrowth,” said Jonathan Gencher, Toronto-based director of currencysales at BMO Capital Markets, a unit of Canada’s fourth-largest bank.“Today risk is off.” Canada’s currency still was headed for its firstthree- month gain in four quarters. It appreciated the most last monthin almost six decades as investors ventured out of havens such as thegreenback and yen into riskier assets, including stocks andcommodity-linked currencies.
Investors should close bets that thegreenback will fall against the loonie, according to Citigroup Inc.,which took such a so-called short U.S. dollar position on June 12 atC$1.1191, resulting in a 3 percent loss, a team of strategists wrotetoday in a note to clients. The USD/CAD is currently trading at 1.1550as of 9:05am, London Time.

The BOE is still thinking about how much more money to pump into theeconomy rather than when to withdraw existing stimulus, even if thereare signs the worst of the downturn is over. A few surveys in the lastfew weeks have suggested the economy has started growing again or thatat the very least its decline is moderating after it shrank by 1.9percent in the first three months of the year. The Bank of England hascut the interest rate to a record low of 0.5 percent and embarked on a125 billion pound asset-buying programme which is due to be completedby the end of July. The GBP/USD is currently trading at 1.6235 as of9:16am, London Time.

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