The yen climbed for a fifth day against the dollar as the risk of a global recession and an extended slump in the world's stock markets prompted investors to slash carry trades.
The currency rose against the Australian and New Zealand dollars, two
favorite targets of such trades, in which investors borrow in nations
with low interest rates and buy higher- yielding assets elsewhere. It
stayed higher as the Group of Seven nations expressed concern about
excessive yen movements and Japan Finance Minister Shoichi Nakagawa
said his country is ready to act.
Japan last sold its own currency in March 2004.
Futures traders increased their bets that the yen will gain against the
U.S. dollar, figures from the Washington-based Commodity Futures
Trading Commission show.
The dollar also fell against the yen as traders increased bets the
Federal Reserve will lower interest rates this week before data that
may show the world's largest economy shrank the most since 2001.
Futures on the Chicago Board of Trade showed a 100 percent chance the
Fed will cut its 1.5 percent target rate for overnight lending between
banks by at least a quarter-percentage point on Oct. 29. Futures showed
no chance of lower rates a month ago.
U.S. gross domestic product contracted at a 0.5 percent annual rate in
the three months through September, according to the median ahead of
Commerce Department data due Oct. 30.
EUR/USD having shown session high in the field of $1,2680, the pair has updated two years low having reached a mark $1,2330.
GBP/USD having opened in the field of $1,5730, the rate has tested area of Friday’s low on $1,5265.
USD/JPY having shown high on Y94,45, the pair has fallen in area Y92,00.
US data starts at 1400GMT, US new home sales are expected to
slow modestly to a 450,000 annual rate in September after falling
sharply in August. Tight credit conditions and financial market turmoil
is keeping buyers away. The supply of new homes remains high relative
to sales, keeping prices on a downward spiral.