Forex - Yen fell against major currencies on rising risk appetite and investors return in carry-trades
The Yen fell broadly on Monday as euphoria over the US bond insurance sector boosted the appeal of stocks and other risky assets, helping to underpin high-yielding currencies like the New Zealand dollar. UsdJpy raced to a session high of 108.22 before retreating in late trade to around 108.09, still up 0.87%. The New Zealand dollar, which has the highest interest rates among industrialized countries at 8.25%, rose to levels not seen since it was floated 23 years ago. NzdJpy advanced 1.44% to 87.95.
AudJpy rose 1.29% to 100.30, while GbpJpy climbed 0.84% to 212.54. The Yen often suffers in time of rising risk appetite because investors borrow it at low Japanese interest rates to fund “carry trades” that invest in higher-yielding currencies.