Yen gains on credit market worries

Story link: Yen gains on credit market worries

The Japanese yen saw gains Friday when investors reacted to more bad news from credit markets, this time a report that Merrill Lynch could take as much as $15 billion in write downs, by backing away from risky investments.

In early afternoon trade in New York the yen traded at ¥109.0100 to the US dollar, to ¥161.3837 to the euro, and at ¥213.5069 to the pound.

Meanwhile, the pound remained near record lows versus the euro, recording a weekly decline against the shared currency for the fourth week in a row, while it also dropped for the second consecutive week in relation to the US dollar.

Among the issues the pound is dealing with was a new report showing that UK factory output dropped 0.1 percent in November against a predicted 0.1 percent gain.

It took $1.9586 to buy a pound in New York, while the pound traded at 75.59p to the euro.

The US dollar was set to weaken against the euro for the third consecutive week after US Federal Reserve chairman Ben Bernanke’s comments Thursday that there could be more interest rate cuts coming in the US on the same day that European Central Bank president Jean-Claude Trichet hinted strongly that the ECB could raise rates again in order to keep inflation in the Eurozone under control.

In early afternoon trade in New York, the dollar traded at $1.4804 to the euro.