By: Barbara Zigah
In Asian trading, the Japanese Yen managed to recoup some of its earlier losses against the U.S. Dollar following the credit rating downgrade of Japanese sovereign debt by Standard & Poor’s. As reported at 12:54 p.m. (JST) in Japan, the U.S. Dollar traded lower against the Yen at 82.70 Yen, down from 82.90 Yen during late New York trading yesterday, well off the 83.22 Yen immediately after the announcement.
The Yen also trimmed losses against the Euro, as profit takers sold off the common currency; recent trading was at 113.35 Yen, a gain of .5%. Euro profit taking pushed the common currency lower against the U.S. Dollar, trading at $1.3710, slightly off the $1.3730 traded late Thursday in New York.
Some market players believe that once the dust settled and investors absorb the shock of the Japanese downgrade, the focus will turn to the downgrade threat in the United States, given that the budget deficit continues to grow. One economist suggests that a generalized U.S. Dollar weakness is perceived in the markets, and is the reason for the currency’s recent softening.
The U.S. Dollar Index, which gauges the greenback’s strength against a co-mingled basket of currencies, fell in Thursday trading to 77.594 DXY, a low not seen in nearly two months.