Tuesday, 15 Mar 2011

Yen Higher vs. Major Currency Pairs

The yen rose against higher-yielding currencies on Tuesday as investors sold riskier assets on fears of slowing Asian economic growth in the wake of the Japanese earthquake, tsunami and nuclear crisis. The JPY is currently trading higher against the GBP by nearly 100 pips at 131.30. It is also trading higher against EUR and USD.

The higher-yielding Australian dollar fell more than 2% against the U.S. dollar, while the New Zealand and Canadian dollars also tumbled as market participants quickly moved to reverse previous long positions in those currencies.

The yen had gained partly on expectations Japanese insurers and companies will repatriate funds to help pay claims and reconstruction costs. Japan faced a potential catastrophe after a nuclear power plant exploded in the aftermath of Friday's earthquake and sent low levels of radiation floating towards Tokyo.