Home Forex Post Japan elections – Tokyo stocks soar, Yen slips

Post Japan elections – Tokyo stocks soar, Yen slips

by Jonathan Adams

The safe-haven yen fell on Monday amid an improvement in investor risk appetite following a surge in Tokyo stocks, but traders said the greenback will be capped longer term by views the Federal Reserve will remain cautious on interest rates.

The dollar rose 0.8 per cent to 101.37 yen after sliding to as low as 99.99 yen on Friday in the wake of the U.S. jobs report. The euro was up 0.8 per cent at 112.020 yen

Job creation in June was much stronger than expected, increasing by 287,000 and easing fears that the U.S. labour market may be faltering. But the report did not change the view that the Fed may not hike rates this year, particularly after May payroll growth was revised down to 11,000 from 38,000.

The euro was steady at $1.1045 (£0.85), after recovering from Friday’s low of $1.1002 (£0.85). The dollar index inched up 0.1 per cent to 96.351, hovering near an 11-day high of 96.697 reached on Friday.

Japan’s Nikkei rose more than 4 per cent following Friday’s gains on Wall Street. Tokyo shares also reacted to Sunday’s election win by the ruling Japanese coalition which fed hopes that Prime Minister Shinzo Abe’s economic policies, such as fiscal stimulus, would progress.

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