Yen Jumps as bin Laden’s Death Causes Demand for Safety

The Japanese yen gained today as fears that the death of Osama bin Laden will cause revenge from Al-Qaeda spurred demand from investors for the currency as a safe haven.
The MSCI Asia Pacific (excluding Japan) Index of shares fell 1 percent. The UK manufacturing PMI declined from 57.1 to 57.0 in April, according to forecasts before the report today. The today’s report is expected to show that the European industrial producer prices slipped 0.1 percent to 0.7 percent in March.
Mitul Kotecha, head of the global foreign-exchange strategy at Credit Agricole CIB, said:

There’s been a little bit of disappointment in terms of some of the data. Concerns about potential retaliation and any sort of fallout in terms of further terrorism is one factor leading to some increase in risk aversion. In this environment, the yen looks like it’s going to see more upside bias.

USD/JPY dropped from 81.20 to 80.97 today as of 6:29 GMT. EUR/JPY declined from 120.41 to 120.01 and GBP/JPY went from 135.20 down to 134.56.
The yen gained against 15 of 16 major currencies. The Japanese financial markets were closed today because of a holiday.

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