Yen largely ignored as Syria threat subsides

Published: 11 Sep at 9 AM Tags: Euro, Dollar,

The yen, popular as a safe-haven investment, has dropped as concerns the US might initiate military action against Syria recede and the Chinese economy appears to be growing. Stocks in Asia are also continuing to rally with the Nikkei N225 adding another 0.5 per cent in Tokyo.

Although some investors are showing more confidence in the emerging markets, others believe that the recent surge in stocks could result in profit taking, which could limit gains. The emerging markets had been suffering because of expectations that less support would be given due to the Federal Reserve reining in its stimulus programme. However, some doubts have arisen as to how severe this will be because of last week’s disappointing US job figures.

Interest in emerging markets assets has been further sharpened by the diminishing threat of a strike on Syria. Since hitting a low of $0.8891 on 28 August the Australian dollar has climbed 4.7 per cent to $0.9307.

The euro is currently little changed against the US dollar at $1.3266 and the yen has been largely ignored by currency investors. The Bank of Japan looks certain to continue its massive monetary stimulus programme in an attempt to lift the country’s economy out of the doldrums.

A climb of 0.8 per cent means the dollar is now worth 100.23 yen. The euro managed to add around 1 per cent to hit a high of 133.31 yen.