U.S. Dollar Rises against Japanese Yen

On January 28, 2009, in Tokyo, the U.S. Dollar edged up versus the Japanese Yen as an enhanced appetite for risk encouraged investors to move out of the safe-haven Yen.  Meanwhile the U.S. Dollar dipped against the Euro as investors awaited the outcome the meeting at the Federal Reserve bank, which will be concluded later today and will reveal the steps being taken by the Fed to ease the credit crunch.  The benchmark interest rate in the United States is almost near zero, investors are looking for additional policy measures, such as the acquisition of long-dated Treasuries.

According to Hideki Hayashi of Shinko Securities, a comment by the Fed about purchasing Treasuries would undoubtedly ease concerns that investors abroad may begin buying less U.S. bonds.  According to data, the Japanese and Chinese investors are the largest purchasers of U.S. bonds, and any change in the acquisition pattern of Treasuries could have a strong impact on the value of the U.S. Dollar.

The U.S. Dollar rose by 0.3% against the Japanese Yen and traded at 89.16 Yen.  The Euro rose by 0.6% against the U.S. Dollar and traded at $1.3256.  The Euro climbed by 0.9% against the Japanese Yen and traded at 118.18 Yen.