Yen Climbs as Hopes for Europe Tarnished

The Japanese yen climbed today, following the last week’s unexpectedly poor performance, as problems in Europe show no signs of subsiding, meaning that safe assets remain in high demand.
There is seemingly no end to bad news out of Europe. Anti-euro sentiment is growing in Italy. Moody’s Investor Service downgraded 28 Spain’s banks. And it looks like not many market participants put hope on the coming summit of European leaders.
The yen thrived in the resulting risk aversion environment. It even outperformed the US dollar, which also profited from the pessimism of traders. Additionally, Japan’s Finance Ministry stated that it is considering measures to facilitate direct trading between the yen and the Chinese yuan, further bolstering appeal the Japanese currency.
USD/JPY fell from 80.42 to 79.64 and EUR/JPY dropped from 100.92 to 99.59 as of 23:30 GMT today. GBP/JPY was down from 125.18 to 123.98.

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