Japanese Yen Falls against the U.S. Dollar in Anticipation of G-7 Solution
Investors anticipate a coordinated approach to the worldwide credit crisis from the Group of Seven, currently meeting in Washington, DC. As a result, the U.S. Dollar surged to a six-month high against Japanese Yen.
Despite huge efforts by policy makers to ease lending activities in the financial sector, tight credit conditions still persist due to investors concerns, which have led to extreme volatility in the financial sector. Consequently, the Japanese Yen recorded earlier gains across the board, surging to its highest level against the U.S. Dollar in 6-months and a 3-month high against the Euro. The Euro and the U.S. Dollar have somewhat recovered, but investors are interested in buying the Japanese Yen.
It is clear that investors are looking for answers from the G7 finance ministers and the central bankers to come up with a comprehensive solution to the credit crisis and revive the global financial system.
According to Vassili Serebriakov of Wells Fargo, New York, there is the hope that the meeting will conclude with some form of coordination action from the policymakers. Nonetheless, it remains a very volatile and extremely nervous market.
In late morning trading in New York, the U.S. Dollar traded up 0.4% at 99.80 Yen after dropping to 97.92 Yen, while the Euro fell by 0.2% to 134.96 Yen