Yen strengthens on weak global stocks

Published: 20 Aug at 10 AM Tags: Euro, Dollar,

The yen has been the big winner as weak global stocks and an emerging market currencies sell-off comes ahead of a meeting at the Federal Reserve scheduled for tomorrow. There are wide expectations that the central bank could scale back its bond-buying programme as soon as next month.

The Japanese currency tends to do well during times of economic uncertainty and market stress. The US dollar lost 0.3 per cent to trade at 97.25 yen. The euro was also down by 0.2 per cent to 129.64 yen. However the big losers were the commodity linked Australian dollar and New Zealand dollar. Both the Aussie and the Kiwi lost around 1 per cent against the yen.

Ahead of Fed policy meetings investors tend to shy away from risk. The euro has not moved much against the greenback and is steady at $1.3330. The past couple of weeks have seen positive economic figures released by France and Germany which has done much to keep the single currency up against its US rival.

An announcement by the Reserve Bank of New Zealand that the Kiwi is overvalued and that home lending restrictions are to be put in place saw the Kiwi tumble 1.2 per cent to $0.7970.

The Aussie dollar also dropped 0.8 per cent against the greenback to $0.9042