By: Barbara Zigah
The Japanese Yen tumbled broadly against the U.S. Dollar, assuaging investors’ fears that the Bank of Japan might have to consider yet another intervention into the currency’s rise. As reported at 2:44 p.m. (JST), the U.S. Dollar was trading at 76.85Yen, a gain of 0.2%; earlier it had pushed higher to 77.25 Japanese Yen following major purchases of the greenback by Japanese banks, U.S. accounts and a large British fund. Analysts note that the Dollar’s rise was very specifically driven higher by these accounts, and appears to be unrelated to forex fundamentals. One trader believes that the amount purchased was massive, speculating it could have been pension fund inflows or unwinding of a sort, and believes further the greenback won’t soon be able to trim the gains made.
The Swiss Franc surged against the U.S. Dollar and Euro, extending gains by 0.3% against the greenback to 0.8036 Swiss Francs and 0.4% against the Euro to 1.1545 Swiss Francs. The Swiss National Bank and officials of the Swiss government have said that they will accept the Swiss currency’s rise as inevitable and just learn to deal with it. Markets had expected that if intervention by the SNB were to occur, it would have been undertaken yesterday morning; once it was clear that there was to be no new measures to curtail the currency’s rise, investors flocked back to the safe haven currency.