As reported at 3:31 p.m. (JST) in Tokyo, the Yen traded at 84.82 Yen, the highest point since 1995, before retreating to 86.05 Yen, a .6% rise on the day. The Japanese Yen continues to rise versus the U.S. Dollar, touching on its highest trade in 14 years. It was learned that early in the day on Friday, the Bank of Japan, in conjunction with officials from the government, were inquiring about Dollar/Yen rates with some commercial banks, thus prompting traders to cover their long positions in the Japanese currency.
The Yen also rose broadly against high-yielding currencies following the news of Dubai’s debt problems; specifically two of the country’s flagship corporations sought to delay repayment of their debt. Many investors, who previously looked to the Middle East region as a bastion of investment and capital sourcing, had their confidence shook, and raised concerns over the possibility of massive debt-related problems in the region. This led to investor unwinding of Japanese Yen-funded carry trades to the detriment of high-yielders, including the Australian Dollar, which slipped to 77.88 Yen, a loss of 1.6%, and the single-currency Euro, which fell to 126.95 Yen, a decline of 1.3%.
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