The yen strengthened against all of its 16 major peers as signs Europe’s debt crisis is deepening boosted demand for haven assets.
Japan’s currency rose versus the euro as Asian stocks extended a global rout before data this week forecast to show Europe’s economy contracted. The yen gained even after the nominee to become the next Bank of Japan (8301) governor pledged more monetary easing to defeat deflation. The euro traded 0.3 percent from the lowest in almost three months against the greenback as Italy edged closer to a new election. Australia’s dollar fell after building approvals unexpectedly declined.
“The risk-off environment and uncertainties about Europe permeating the market at the moment are adding to demand for the yen,” said Jim Vrondas, the Sydney-based chief currency and payment strategist at OzForex Ltd. “Traders are being squeezed out of positions betting on yen declines and we think this yen strength has longer to run as they continue to unwind positions.”
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