Yen weakens on gains in US equities

Story link: Yen weakens on gains in US equities

The yen declined versus several major currencies as a rise in US equities sent investors in search of more risky investments.

The US dollar, meanwhile, was helped by a Commerce Department report showing that new home sales in the US rose by 3.3 percent in April, led by a significant increase in sales in the Northeast US.

On the other hand, a separate report showed that home prices were down by 14.1 percent, the most in 20 years, in the US in the first quarter, with the median price of a new home at $246,100 in April.

In late morning trade in New York, the yen was at ¥104.0200 to the dollar and at ¥163.5663 to the euro, while it traded at ¥99.8227 to the Australian dollar and at ¥82.123 to the New Zealand dollar.

Interest rates are currently at 7.25 percent in Australia and at 8.25 percent in New Zealand, making those currencies attractive investments when financed by the yen as the interest rate in Japan is currently 0.5 percent.

The Australian and New Zealand dollars also gained on the greenback, with an Australian dollar worth 95.96 cents US and the New Zealand dollar worth 78.94 cents US, as the kiwi especially was helped by a gain in business confidence.

The euro was hurt by weak consumer confidence in Germany and poor business confidence in France, so that it took $1.5725 to buy a euro.

The pound dropped on continuing troubles for the housing market, as media reports said that over 20 percent of home buyers who had poor credit ratings fell behind on their mortgage payments in the first quarter while a separate report showed UK home prices down for an eighth consecutive month in May.

The UK currency was worth $1.9756 to the pound while it traded at 79.59 to the euro.