The yen exchange rate significantly weakened on Thursday in global currency markets against the euro and the dollar due to easing tensions in financial markets and a renewed investor appetite for riskier asset classes. The dollar strengthened against the yen by 1.4 percent to 116.90 yen by noon. The euro gained even more against the Japanese currency, rising 1.7 percent to 158.81 yen.
At the same time, the single European currency strengthened against the dollar by 0.3 percent to 1.3585 dollars. The pound recorded an even larger increase in value against the U.S. currency, up 0.7 percent, surpassing the $2.00 mark for the first time in over a week.
The market was calmed by the announcement from Bank of America Corp that it would inject two billion dollars into the largest U.S. mortgage lender, Countrywide Financial Corp, to alleviate its illiquidity. Tensions further eased after last week’s decision by the U.S. central bank, the Fed, to lower the discount rate to 5.75 percent. The easing of tensions in global financial markets coincided with the decision of the Bank of Japan to maintain key interest rates at the current level of 0.5 percent. (Hina)
