The yen, the most attractive currency in times of uncertainty, started this week climbing against the dollar and the euro, as pessimistic reports last week led to speculations that the economic recovery will falter, raising risk aversion levels among traders.
Markets opened with a certain degree of pessimism this week, as several news suggested that there may be still a long way for a world economic recovery to occur. Russian President Dmitry Medvedev and French Finance Minister Christine Lagarde made individual remarks on the fact that the world main currencies are not fulfilling correctly international trade needs and foreign exchange should be regulated in an alternative way, forcing the greenback down against the yen. In Europe, IKB Deutsche Industriebank AG posted 580 million euros losses in the fiscal year ending in March 31, reaffirming speculations that the European banking system is still facing major problems, consequently bringing the Eurozone currency down.
After a risk appetite spree unleashed in April as the world posted its first signs of economic rebound, now a new scenario has been built, as further evidences that the economy is rebounding failed to appear, being that a very favorable factor for the yen, according to currency specialists. As long as markets remain concerned with the global slump, the yen will climb.
USD/JPY fell to 95.29 as of 11:12 GMT from an opening price of 95.85. EUR/JPY followed, trading at 132.49 from 133.95.
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