Friday, 19th July 2024

Yen slumps against the euro and the dollar

Published:  6 Feb at 9 AM
The yen has hit its lowest level in 33 months against the euro and the US dollar as investors expect a new governor of the Bank of Japan to be more receptive to aggressive monetary easing. On Tuesday, current governor Masaaki Shirakawa announced he would be ending his term three weeks earlier than expected on 19 March.

A meeting next week by G20 finance ministers is unlikely to focus on currencies. The dollar settled at 93.77 yen, an increase of 0.1 per cent and the euro last traded 0.1 per cent up at 127.40 yen.

The euro has also gained against the dollar to end at $1.3585. Signs that the debt crisis in the eurozone could be easing have also helped to push the single currency. However, President Hollande of France has called for a mid-term target to be set for the euro.

Investors are now focusing on a meeting at the European Central Bank on Thursday as many are concerned that a strengthening euro could be bad news for a region still struggling with recession.

Weak retail sales in Australia have forced the Aussie dollar to its lowest level in six weeks as further interest rate cuts become more likely. The dollar ended at $1.0354, a loss of 0.3 per cent. In the UK a drop in the value of sterling has prompted some to speculate that the Bank of England could introduce further measure of quantitative easing to help the economy.