By: Barbara Zigah
The U.S. Dollar edged slightly lower against the Japanese Yen in Tokyo trading as investors pared away their carry trade positions, but most analysts expect that move will be short-lived with hedge fund operators and Japan-based life insurers positioning themselves ahead of what is likely to be another Yen slide. As reported at 3:13 p.m. (JST) in Tokyo, the U.S. Dollar slipped against the Yen to 82.42 Yen, off a 3-week trough of 82.19 Yen. Speculation is that Japanese hedge funds and life insurers will buy back the greenback for Treasury and debt purchases as and when it falls nearer to 82 Yen.
The Euro, yesterday, took a hard hit as investors’ fears resurfaced that Greek debt will need restructuring within the next few months, well ahead of the launch of the permanent stability mechanism. Also, the United States has been cautioned with a negative outlook by yet another ratings agency, this time Standard & Poors, that their current AAA credit rating is in jeopardy of being downgraded unless the deficit problem is addressed soon. One analyst said that while the negative outlook might have come as a jolt, it was really no surprise to anyone and that markets should absorb fairly well.