Japanese Yen down on suicide attacks Indonesian hotels

Japanese Yen down on suicide attacks Indonesian hotels

07-17-2009 13:13

The Japanese Yen, generally considered as a safe-haven investment, climbed once more against almost all major currencies as a result of the suicide attacks in two Indonesian hotels, which created some tension on the Asian financial markets today. The terrorist bombing campaign blasts hit two luxury hotels and killed at least 9 people.

Tension among traders

At the start of the week the Yen dropped against many currencies on the back of traders seeking risky assets, while yesterday it rose as the CIT Group Inc. commented that it could apply for bankruptcy and it will not acquire US guarantee for its bonds. These comments created a tense atmosphere among traders on which they preferred Yen priced investments. Two separate explosions at luxury hotels in the Indonesian capital Jakarta resulted in the Indonesian Rupiah to fall to a two-week record low, while various Asian equity markets decreased, which resulted in the Japanese Yen being the most secure investment in the Asian region.

Return to safe-haven Yen

The global economy continues to deteriorate, underlined by Japanese analysts, while circumstances remain fragile despite rising optimism. For that reason and due to the explosions in Indonesia, the atmosphere on stock markets has become more pessimistic, resulting in traders seeking the safety of the Japanese Yen at the end of this week’s trading sessions.