Yen strengthens on investor nervousness

Story link: Yen strengthens on investor nervousness

The Japanese yen was significantly stronger on Wednesday after reports, which were quickly denied by the United States, that some sort of military exchange had taken place between Iran and the US in the Persian Gulf. Even though the report turned out to be false, investors were nervous enough to exit risky investments such as carry trades in search of safer places for their money.

The yen added 1 percent against the US dollar, to ¥116.70, while it also gained 1 percent versus both the euro and sterling, to ¥155.70 and ¥229.23 respectively. The Japanese currency did even better in relation to the Australian and New Zealand dollars, adding 1.1 percent to ¥94.17 against the Aussie and gaining 1.7 percent on the New Zealand currency, to ¥82.95.

The US dollar, meanwhile, was unchanged against both the euro and sterling, to $1.3350 and $1.9650 respectively. Before recovering to stand even to the dollar, sterling had dropped to as low as $1.9598 versus the greenback after new figures showed that the UK current account deficit was at £12.7 billion in the fourth quarter, a new record. Sterling was also even against the euro, at £0.6795.