By: Barbara Zigah
Following the 8.9 magnitude earthquake and resultant tsunami which hit the northern coast of Japan a short while ago, the Japanese Yen broadly fell against the majors. As reported at 3:05 p.m. (JST) in Tokyo, the Japanese yen was trading lower against the U.S. Dollar at 83.15 Yen, slightly rebounding from the 83.29 Yen trade which occurred immediately following the event, the lowest price since late February. Against the common currency Euro, the Yen slipped 0.4% to trade at 114.84 Yen. As aftershocks continue to affect the island nation, the Yen is likely to be under further downward pressure.
Elsewhere, the Euro continues to be vulnerable to the possibility of a sell-off during the global trading day, should the outcome of the European Union summit fail to provide a credible response to the Eurozone’s fiscal troubles. The Euro was trading against the U.S. Dollar at $1.3815, a gain of .1% after steep declines in yesterday’s trading day.
One analyst suggests that if the markets are disappointed with the policy-makers response to the debt crisis, the Euro will be challenged in the near term. He cautions that that challenge may be significant, as market players appear to be overly confident of a quick resolution. In the medium-term, however, the likelihood of an ECB rate hike will generally benefit the Euro.