The yen fell today, dropping for the fourth consecutive session, as China’s interest rate cut triggered speculations that the country is going to stimulate its economy. Forex traders felt optimism and left safer currencies in favor of higher-yielding ones.
The Peopleâs Bank of China announced that it would lower the key one-year deposit rate and the one-year lending rate by 0.25 percentage point. There was good news from Europe as Jean-Claude Juncker, the leader of eurozone finance ministers, said that Spain would get aid. German Chancellor Angela Merkel stated that the nation is ready to use financial instruments to support the eurozone, but did not specify the nature of those instruments.
The yen may yet rebound in the near future as there was some bad news. Federal Reserve Chairman Ben Bernanke voiced concern that the crisis in Europe may hurt economic growth in the United States as well as in the rest of the world. Fitch ratings downgraded Spain’s credit rating to BBB from A with negative outlook.
USD/JPY climbed from 79.20 to 79.65 as of 19:35 GMT today, reaching the intraday high of 79.79, the highest since May 23. EUR/JPY was up from 99.66 to 100.28 and its daily maximum was at 100.62 — also the highest since May 23. GBP/JPY advanced from 122.71 to 123.81.
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