Yen holds gains, European political risks generate safe-haven demand
By Shinichi Saoshiro
TOKYO (Reuters) - The yen held large gains against a number of peers on Tuesday as investors sought refuge in the safe-haven Japanese currency amid a latest rise in European political concerns.
The dollar traded at 111.930 yen JPY= after slipping to 111.590, its lowest since Nov. 28. The euro fetched 119.910 yen EURJPY= following a dip earlier to a two-month low of 119.750.
The Australian and New Zealand dollars and the pound also gave ground to the buoyant yen.
The Japanese currency had rallied versus the dollar the previous day on an increase in risk aversion, dragged down as U.S. Treasury yields fell in tandem with Wall Street shares and crude oil prices.
It also attracted demand thanks to the latest rise in investor caution toward European political developments generated after France's far-right National Front leader Marine Le Pen on Monday launched her presidential bid, vowing to fight globalization and take France out of the euro zone.
French government bond yields rose sharply and European stocks fell amid perceived risks to the already strained European political establishment.
"The drop in euro zone equities and the rise in European and U.S. bond yields are pushing up the yen," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
"In comparison to last week, the yen's appreciation has been significantly more widespread. But as the steadiness in some emerging market currencies show, it has not been a one-way 'risk off' event," he said. Continued...