The yen weakened as demand for haven assets waned after a surge yesterday pushed the Japanese currency to the strongest level versus the euro in five months.
The yen dropped against all but two of its 31 major peers, with higher-yielding currencies including Brazil’s real and Indonesia’s rupiah leading gains, even as Russia and Ukraine blamed each other for the downing of a Malaysian Airline System Bhd. plane. The euro fell below $1.35 for the first time in five months. A gauge of the dollar erased an advance after U.S. consumer confidence declined.
“Euro-yen is a very important cross to watch — I think that could be a very good risk barometer in the current environment,” said Ian Stannard, head of European currency strategy at Morgan Stanley in London. “If we do start to see these events continuing, then the market will have to start to take that on board.”