Euro gains on yen

The euro reached a six-month peak on the yen on the back of remarks from German Chancellor Angela Merkel that European leaders are behind the European Central Bank in carrying out measures to ease the region’s debt crisis.

Merkel said that comments made by Mario Draghi, the president of the ECB, insisting that the central bank was prepared to do everything it could to solve the debt crisis were completely supported by European leaders. This came as a boost to the common currency as there had been murmurings that the leaders were having disagreements on the best way to tackle the issue.

The euro jumped to a monthly-high of 98.40 versus the yen as it broke away from 97.997, its 55-day moving average. It also stayed well clear of a recent two-year trough versus the US dollar at $1.2355 on the hope that the ECB was ready to carry out action to cut the borrowing costs of embattled Spain and Italy next month.

The greenback also climbed to a five-week peak against the yen, boosted by a recent increase in US government bond yields after stronger economic data supported the currency and more hunger for riskier assets acted as a hindrance to the safe-haven yen.