Yen gains after warning

Story link: Yen gains after warning

The yen was up in relation to all sixteen most active currencies on Thursday on warnings from Bank of Japan officials that economic growth will slow globally in 2008.

The caution send investors away from risk, while the yen especially gained against the dollar on the further news that Philadelphia-region manufacturing contracted to its lowest level since April 2003 in Decmeber.

It took ¥112.9650 to buy a US dollar in early afternoon trade in New York, while the yen traded at ¥162.0822 to the euro, at ¥224.0884 to the pound, at ¥97.0651 to the Australian dollar and at ¥85.7248 to the New Zealand dollar.

The US dollar gained on the euro and the pound on the theory that the Federal Reserve will refrain from issuing in any interest rate cuts in 2008 due to increases in inflation.

In New York, the dollar traded at $1.4348 to the euro and at $1.9837 to the pound.

The pound was lower against most major currencies on the theory that the Bank of England will cut interest rates in order to help out a weakening economy.

It cost €1.3826 to buy a pound in early afternoon trade in New York.