Yen pares gains as traders digest US bailout U-turn
Friday, 14 November 2008
TOKYO, Nov 13 (AFP): The yen lost ground in Asia today, giving back some of the previous day's strong gains that were sparked by news Washington is scrapping a plan to buy up toxic mortgage debt.
The dollar rose to 95.79 yen in Tokyo afternoon trade, up from 94.61 in New York late Wednesday. The euro was at 1.2481 dollars after 1.2490 while gaining to 119.50 yen from 118.19.
The Japanese currency soared in New York trade after the US government said the Wall Street bailout plan would be refocused on capital injections for ailing banks and possible steps to help the non-bank financial sector.
The move suggested that the original plan to buy up troubled mortgage-backed securities to unfreeze credit markets was "ineffective," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.
"Investors have bought back the yen as a result," he said.
Market watchers said the yen could turn higher again because of falling stock markets and growing worries about the financial crisis. The yen tends to benefit from market turmoil because it is often sold to fund risky bets, and is seen as a relatively safe haven investment.
The dollar rose to 95.79 yen in Tokyo afternoon trade, up from 94.61 in New York late Wednesday. The euro was at 1.2481 dollars after 1.2490 while gaining to 119.50 yen from 118.19.
The Japanese currency soared in New York trade after the US government said the Wall Street bailout plan would be refocused on capital injections for ailing banks and possible steps to help the non-bank financial sector.
The move suggested that the original plan to buy up troubled mortgage-backed securities to unfreeze credit markets was "ineffective," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.
"Investors have bought back the yen as a result," he said.
Market watchers said the yen could turn higher again because of falling stock markets and growing worries about the financial crisis. The yen tends to benefit from market turmoil because it is often sold to fund risky bets, and is seen as a relatively safe haven investment.