FOREX-Yen under pressure as global stock markets rally

Wed Jul 13, 2016 7:24am EDT
 
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* Dollar/yen fall of over 4 pct in 2 days

* Risk appetite fades a little

* Bank of Canada in focus later in day

By Jemima Kelly

LONDON, July 13 (Reuters) - The yen lost ground on Wednesday, extending losses against the dollar after recording its biggest two-day fall in almost two years, as risk appetite bounced back in the European session.

The safe-haven yen had tumbled 4 percent against the dollar since the start of the week, its worst performance since November 2014, after Japan's Prime Minister Shinzo Abe's ruling coalition won a clear victory in upper house elections, fuelling expectations of more fiscal stimulus.

Monday's news that Britain would by Wednesday have a new prime minister - current interior minister Theresa May - and a bumper U.S. jobs report at the end of last week had also boosted risk sentiment, which had served to further dent the yen.

Some investors had hoped that former U.S. Federal Reserve chair Ben Bernanke's meetings with Japanese leaders this week would herald the adoption of "helicopter money", a term which Bernanke has in the past mentioned as a way central banks might finance government budgets to fight deflation.

But the dollar hit a session low of 103.95 yen shortly after Chief Cabinet Secretary Yoshihide Suga downplayed the idea.   Continued...