The Yen fell the most since 2008 versus the U.S. Dollar as Japan finally intervened in the foreign exchange in order to weaken its overvalued currency and combat speculation. The Finance Minister, Jun Azumi, cited exports as one of the main reasons for intervening in the market. The Japanese monetary unit continued to dip further as Azumi pledged to continue selling the Yen after it reached a post-World War II record high yesterday.
Meanwhile, the U.S. Dollar gained against the Euro as risk aversion took over the markets, and as reports published by China’s official news agency, Xinhua, indicated that China will not take on the role of savior for the Euro region. In addition, analysts say the euphoria from last week’s summit agreement has now died down, and investors are growing weary of the ongoing debt crisis.
With the turmoil in the Euro zone, it has become evident in the FX trading markets that the Pound Sterling is becoming the currency of choice for those looking to get involved with the government bond rally. However, the Sterling dipped against the U.S. Dollar following the release of metrics showing a decline in business expectations as well as housing prices. The U.K.’s currency value dipped as other data revealed a decline in mortgage approvals for September. The British Pound rose against the Euro and the Yen as Japan intervened in order to reduce the price of its currency, and as investors were speculating that the current European plan won’t contain the sovereign debt crisis.