Yen loses earlier gains

Published: 31 Oct at 9 AM Tags: Euro, Dollar,

The Yen has weakened slightly against the US dollar as the appetite for risk grows. The yen has now lost the gains made following an announcement by the Bank of Japan that it would be holding back on introducing stronger moves to boost the economy.

Societe Generale analyst, Kit Juckes, said the policy of the Bank of Japan meant that the yen would remain a sell over the long term. He added that a reduction of US treasury yields would mean investors will be looking to re-buy the US dollar and the yen at lower levels.

Following the expected announcement that the BOJ would be introducing an 11 billion yen bond buying strategy to help kick start the economy the dollar fell to 79.28. It has since recovered to 79.59 yen.

Borrowing costs in Italy have fallen sharply following strong interest in bond buying. The appetite for risk was also helped as Hurricane Sandy appears to have passed over New York without causing as much damage as some had predicted.

Both the Australian dollar and the euro have bounced back against the yen. The euro is up to 103.12 yen and the Aussie dollar has recovered to 82.43 yen. Against the US dollar the euro is currently at $1.2966.