Weakened Asian Equities Push Yen Higher against Euro/Dollar

By: Barbara Zigah

A weakened equity market in Tokyo helped to push the common currency Euro and the U.S. Dollar down versus the safe-haven Japanese Yen. Early on in the Asian trading session, investors with a long-term outlook and pension fund operators from Japan bought into the Euro and greenback on speculation that overseas currencies would offer a better return than the safe-haven Yen, but choppy trading caused investors to reverse direction and buy back their Yen. As a result, at 2:30 p.m. (JST) in Tokyo, the U.S. Dollar was trading against the Japanese Yen at 88.53 Yen, compared to an earlier higher trade of 88.87 Yen. It was the same story against the Euro, with the Yen slipping to 111.50 Yen from the earlier high of 112.07 Yen.

Some investors see the U.S. Dollar falling against the safe-haven Japanese currency later today, perhaps even to 88.20 Yen, dependent upon the release of key economic data from the U.S. and the Euro-zone. Corporate earnings from U.S. computer chip maker Intel are expected to be weak and portend a dismal global economic recovery. Meanwhile, in Germany, polled economists predict a decline in the ZEW Index from 28.7 to 26.0, the decline generally attributed to the sovereign debt problems within the Euro-zone.