Yen posts sharp gains

The safe-haven Japanese yen gained ground on the dollar and the euro amid concerns about banks in Greece and Spain, contagion chances if Greece exits the euro and weak economic date from the US, reports Reuters.

The yen earlier climbed to a three-month high versus both the euro and the dollar as talk of a potential Spanish bank downgrades drove European equities down sharply and kept the euro under pressure. The single currency had also dropped to a four-month low against the dollar but recovered to trade marginally higher on the day.

The euro fell to 100.54 yen, its lowest against the Japanese currency since 7 February. The greenback also went down sharply against the yen, dropping to 79.12 yen, the lowest it has been since 17 February. The dollar was down by 1.3 per cent at 79.24 yen by late afternoon trading. The euro went down to $1.2665, the lowest it has been since mid-January. It lasted traded down by 0.2 per cent at $1.2694.

BNP Paribas said in a note that the fact that there is so much talk of Greece’s possible exit from the euro shows the threat to the country’s continued membership in the region is a real one. It went on to state that shorting the single currency against the greenback was still the best way to trade the pair.