Forex trends: yen strengthens as most European and Asian stocks plummet

September 7, 2010 - 4:29am

In early European trading today, the Japanese unit firmed on drop in most Asian and European stocks that propelled traders to seek for safe-haven currencies. The yen thus reached a 1-week high against the pound and multi-day highs against the rest of majors, barring the Swiss franc.

In equity front, Japan's Nikkei Stock Average eased by 0.81%, South Korea's Kospi Composite fell by 0.26%, Taiwan's weighted average dropped by 0.08%, Australia's All ordinaries index slipped by 0.06% and China's Shanghai composite slumped by 0.10%.

Meanwhile, New Zealand's NZX-50 was marginally up by 0.99%, Bombay stock exchange advanced by about 0.33% and Hong Kong's Hangseng added 0.01%.

Turning to European stock market, UK's FTSE 100 Index is currently down by 0.37%, France's CAC 40 is trading lower at 0.74% and Germany's DAX is presently trading down by 0.51%.

The yen advanced to a 1-week high of 128.83 against the pound around 2:40 am ET and a move above the 128.70 resistance could set its strongest in nearly 3-1/2 months. Currently, GBP/JPY rally is quoted at 129.13.

Recouping most of its early Asian session losses, the yen advanced to as high as 82.99 against the Swiss franc before holding steady around 3:25 am ET. CHF/JPY pair is presently worth 83.05, compared to a 2-day low of 83.43 hit earlier in the Asian session.

The yen soared up to a 6-day high of 107.32 against the euro around 2:40 am ET and the next likely resistance level for the domestic unit is seen at 107.0. EUR/JPY pair is presently quoted at 107.36.

The yen also advanced to a 6-day high of 83.80 against the US dollar around 3:25 am ET and is approaching its August 24th high of 83.60, which could set its peak in more than 15-years. USD/JPY rally is presently trading at 83.90.

The yen appreciated by 1 percent to reach a 4-day high of 76.43 against the Australian dollar around 3:30 am ET from its early Asian session's low of 77.33. AUD/JPY pair is presently worth 76.46 with 76.0 seen as the next likely target level.

The yen advanced to a 4-day high of 80.61 against the Canadian dollar and 60.34 versus the NZ dollar around 3:30 am ET and the next likely resistance levels for the domestic currency are seen at 79.90 and 60.10, respectively. At present, the Japanese currency is trading at 60.36 against the kiwi and 80.63 versus the loonie.