The Dollar showed some rare strength today in Asia as traders took profits from higher risk currencies and equities slid lower, adding some muscle to the Japanese yen as well.
Many investors feel that Japan is lagging behind other Asian countries that are leading the global economy out of the recent credit crisis and are thus putting their money to work elsewhere. Stocks in Japan were hobbled as the Nikkei hit a four month low and the Topix extended its losing streak to a seventh consecutive day as investors searched for growth potential in neighboring nations.
Yen Crosses were well offered from the start of the session, and that selling did not relent until late in the day when the damage was clearly done. GBP/JPY slipped a big figure from near the 149.70 highs to touch bottom just under 148.70. EUR/JPY fell short of a big figure move, skidding from 133.75 to 132.80, while NZD/JPY dropped about 110 pips to 65.60 and the AUD/JPY declined almost 90 pips to 82.20.
These types of directional moves have been rare as of late in Asia, but fear over the financial sector in Japan forced a wave of risk aversion to flood the market. USD/JPY was a bit more balanced as it only tumbled about 45 pips to 89.05 due to the rare dollar strength in the market.
The dollar gains were less dramatic as EUR/USD traded lower by 60 pips to 1.4905 and the pound slipped almost 50 pips to 1.6685 lows. The Aussie was once again hit hard as it dropped from 0.9300 to near 0.9220 on the day. The Kiwi dollar was damaged as a rival political party stated it no longer saw eye to eye with the RBNZ and its mission to stem inflation. With fear that rate hikes might now be few and far between, the NZD/USD fell from 0.7465 to 0.7360 lows on the day.
Gold was way off of New York record highs near $1153.00 as many traders felt the hot commodity was overbought as of late, dropping the precious metal under $1140.00 for lows as the stronger dollar helped hinder any upward progress.
