In early morning trading in Tokyo, the Japanese Yen slipped broadly after U.S. stocks saw some gains on optimism about a new U.S. stimulus package. The Japanese Yen’s retreat against the Euro enabled the single currency to extend its rebound from a 5-week low against the U.S. Dollar.
Investors' risk appetite rebounded slightly after stocks on Wall Street stocks snapped their six-day losing streak, boosted by hopes that the Federal Reserve would provide additional capital to the banking sector, including Bank of America. The Senate has approved the release of the remaining portion of the $750 billion bailout package for the incoming administration.
According to analysts, the primary focus of the markets in the coming weeks will be how best to solidify the recovery of the stock market. According to Estuko Yamashita of Sumitomo Mitsui Bank, it may mean that the Japanese Yen will move defensively against both the U.S. Dollar and the Euro.
The Euro climbed by 1.25% against the Japanese Yen and traded at 119.35 Yen, bouncing back from 116.24 Yen, the lowest trade price in more than 6 weeks. Meanwhile, the Euro rose by 0.8% against the U.S. Dollar and traded at $1.3220. The U.S. Dollar rose by 0.5% against the Japanese Yen and traded at 90.30 Yen.