The Japanese Yen rose today, boosted as a drop in European shares raised investors concerns about risky positions, while investors awaited interest rate decisions by major central banks within the Euro Zone.
Analysts are anticipating that New Zealand, the United Kingdom and Sweden will need to slash interest rates by at least 100 basis points in order to steer their troubled economies clear of the global recession. Yesterday, Australia’s central bank reduced their interest rate by 100 basis points.
The Japanese Yen hovered around a 5-week high versus the U.S. Dollar and was supported as shares in Europe fell by 1.9%, while economic data on the service sector in Europe showed weakness in the economies in the Euro zone.
According to Paul Robson of RBS in London, the trade risk is primarily to the Japanese Yen, which tends to benefit against all other currencies.
On December 3, 2008 at 09:14 GMT, the Euro fell by 1.1% against the Japanese Yen and traded at 117.32 Japanese Yen; meanwhile, the Euro dropped 0.6% against the U.S. Dollar to $1.2630. The U.S. Dollar slipped by 0.5% to 93.05 Japanese Yen.