The yen, known for its refuge investment profile, rose for another day versus most of the 16 main traded currencies as explosions in Indonesia brought a certain amount of tension to financial markets in Asia this Friday.
After starting the week posting losses versus a significant number of currencies due to a rise in risk appetite among traders, the yen rebounded since yesterday, when concerns regarding CIT Group Inc., which stated that will not obtain U.S. guarantee for its bonds and may file for bankruptcy, made traders once again tense and opting for yen priced assets to protect their portfolios. Today, two hotels in Jakarta, the capital of Indonesia, were target by explosions, which brought the Indonesian rupiah to the lowest level in two weeks and several Asian stock markets down, once again, leaving the yen as the safest option for traders in the region.
Japanese analysts stress on the fact that the world economy still did not find its way out of the current recession, and even if optimism sometimes rises in markets, the situation is delicate and a terrorist attack like todays in Jakarta adds pessimism in equities markets, bringing traders back to the yen before the end of the weekly session.
AUD/JPY traded at 74.91 as of 9:43 GMT after hitting 75.80 hours before the blast in Indonesia. CHF/JPY followed, being traded at 86.84 from a previous rate of 87.52.
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