Yen firm as investors look to Italian bond sale

As investors look towards an auction of Italian bonds the yen has held against other major currencies. Recent elections in Italy have ended in a political stalemate and seen the country’s borrowing costs soar. If these costs remain high they could have a detrimental effect on the euro.

The dollar dropped 0.1 per cent against the Japanese currency to end at 91.90 yen. However this is still up against Monday’s low of 90.85 yen. The euro also hit a low of 118.74 yen at the beginning of the week and has now settled at 120.05 yen.

According to market experts the yen has recently found itself stuck between investors looking to build short positions and those hoping to book profits. Expectation that the Bank of Japan will introduce more aggressive policies to create monetary stimulus has seen the yen become the worst performing of the major currencies this year.

Market concerns have been alleviated by suggestions from the US Federal Reserve that a policy of bond buying will not end sooner than expected. Investors have also moved their attention to the yen from the euro as renewed fears for the single currency are being fanned.

Commodity currencies have also been hit with the Aussie dollar falling slightly to $1.022.