Yen Appreciates as Shares Drop on Fiscal Cliff Deadlock

By TraderVox.com

Tradervox.com (Dublin) – Japanese yen appreciates against its major counterparts as Asian stocks declined. The drop came as US lawmakers struggled to reach a consensus on fiscal cliff issue boosting demand for safe-haven assets. The currency appreciated to its strongest in one week against the US dollar after Harry Reid, the US Senate Majority Leader, indicated that he was unhappy with the progress made in solving the fiscal cliff issues. The euro dropped over the yen for a third day before data forecast showed Germany’s jobless rate rose to the highest level.  Daisaku Ueno a senior foreign exchange fixed income strategist in Tokyo  at Mitsubishi UFJ  Morgan Stanley security Co, said that continued negotiation over the fiscal cliff will create unacceptable environment due to fall of dollar over yen as euro is most likely to edge down from perspective of economic fundamentals.

Japanese currency gained 81.79 per dollar, the strongest it has been since Nov.21, before selling at 81.83 during mid-day trading in Tokyo, which is 0.4% stronger than yesterday’s close. 17-nation currency has lost 0.6%to105.76 yen and 1.1% this week. The dollar has gained 0.1% to 0.2% when it was bought $1.2925-$1.2943 per euro from yesterday. The Japanese currency appreciated as Asia Pacific Index of shares dropped by 0.5 percent the same as the Standard & Poor’s 500 stock Index.

The dollar index was marginally changed at 80.399 after advancing by 0.2% yesterday. The dollar index is used by Intercontinental Exchange Inc. to track US dollar against six currencies. Makoto Noji, a currency strategist at SMBC Nikko Security Inc in Tokyo, said that due to worries over the U.S fiscal cliff and global economy are at risk. Due to limited demand for the euro, there is a sign of drop in the economic growth in Europe while in Germany unemployment rate stood at 6.9% in the region biggest economy.     

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox