Yen Returns to Fall as Stocks Continue Rally

The yen had another day of losses as equities markets around the world rebounded, damping demand for the Japanese currency as a refuge, and making high-yielding currencies to climb.

The first solid signs of economic recovery in the European Union were confirmed by its leaders which will no longer take measures to stop the worst economic recession in the region in 50 years, making the yen to lose against the euro after the first days of positive performance in a month. Commodity linked currencies like the Australian dollar, and emergent market high-yield currencies like the South African rang led the list of gains versus the yen, which was rebounding after mixed economic signals increased risk aversion among traders in the beginning of the week. The yen, having a safe haven investment profile, has been losing sequentially since the beginning of April, when signs of a world economic recovery boosted a rally in equities markets spurring demand for high-yielding assets.

The pressure is on the yen once again, according to specialists. After a rather misty beginning of the week were positive and negative data helped the yen to gain a bit of terrain compared to higher-yielding positions, this Friday was rather optimistic, making the Japanese currency, to lose once again versus most of the main currencies.

EUR/JPY climbed to 135.84 as of 1:15 GMT from a previous rate of 133.45. AUD/JPY traded at 78.04 from 76.25.

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