Yen declines on hopes for economy

Story link: Yen declines on hopes for economy

The yen was lower Monday as improved sentiment on hopes that the worst of the economic crisis could be over sent investors looking for more risk, although by late morning trade in New York, the Japanese currency had gained back some of its earlier losses.

At around 11:30 a.m. in New York, the yen traded at ¥134.7986 to the euro and at ¥100.735 to the US dollar.

The higher-yielding Australian and New Zealand dollars, with interest rates at 3.25 percent and 3 percent respectively compared to near-zero rates in Japan and the United States, especially benefited from investor willingness to make risky deals.

The yen traded at ¥71.5905 to the Aussie and at ¥59.3296 to the kiwi a nearly midday in New York, while the Aussie was worth 71.07 cents US and the New Zealand dollar cost 58.86 cents US at the same time.

The pound, meanwhile, saw gains against the greenback and the yen after a successful stock sale by HSBC Holdings (LSE: HSBA; NYSE: HBC; Euronext: HSBC; SEHK: 005), in which around 97 percent of the shares offered were sold.

The pound traded at 90.78 to the euro while it cost $1.4741 to buy a pound and the UK currency was worth ¥148.4891.

Some analysts were concerned, however, that the pound could decline again after the Society of Motor Manufacturers & Traders said that car sales in the UK dropped by 30.5 percent in March.

Risk appetite also sent the South African rand higher versus the US dollar as it traded at $9.0725 to the greenback in late morning trade in New York.