Yen weakens on China stimulus package

Yen weakens on China stimulus package

Story link: Yen weakens on China stimulus package

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The yen weakened Monday on a return to interest in carry trades after China announced a stimulus package worth 4 trillion yuan ($586 billion) over the next two years, much of which will be spent on infrastructure improvements in China.

By later in the New York session, however, the yen had made back some of its declines at just before 12:30 p.m. there it traded at ¥125.2356 to the euro, at ¥98.005 to the US dollar, at ¥67.75 to the Australian dollar and at ¥57.482 to the New Zealand dollar.

The euro also gained on the US dollar, which traded at $1.2778 to the shared currency, but the euro stood to lose gains after comments from European Central Bank president Jean-Claude Trichet, made during a trip to Brazil, that hinted at more possible Eurozone interest rate cuts from the ECB.

The pound was stronger versus the greenback but weaker versus the euro, trading at 81.56p to the euro while it took $1.5669 to buy a pound, but like the euro gains for the UK currency could be limited by sentiment that the Bank of England could cut interest rates further.

The South African rand made gains earlier on more enthusiasm for risk, but had given back some of those gains by early afternoon trade in New York, when it traded at R10.066 to the US dollar and at R12.862 to the euro while it took ¥9.7362 to buy a rand.