By TraderVox.com
Tradervox (Dublin) – There have been rumors that yen declines registered last week were excessive reversing the trend of the yen against the dollar. In the Asian session, the yen increased against the dollar as Asian stocks declined. However, the euro had earlier touched four and half months high after Angela Merkel, the German Chancellor indicated that euro zone officials had discussed the possibility of combining the euro zone bailout funds as effort to strengthen the financial firewall of the region.
The demand for the currency was also supported by the speculations about the result of Mario Monti’s meeting with the euro zone employers. They are expected to make some changes in the labor laws of the region.
Further, the 17-nation currency was supported by speculation about the German PPI report expected on Tuesday March 20. The European Current account report has also affected the EURJPY pair. The yen gained 0.5 percent against the euro to trade at 109.37 yen per euro after dipping to 110.15 earlier in the day. This is the weakest the yen has been against the euro since October 31. Against the dollar, the yen increased by 0.4 percent to settle at 83.08 yen per dollar.
Last week, the Japanese currency had performed poorly against its peers decreasing by 1.5 percent during the week. The increase against the euro can be attributed to the sentiments from the region about another debt crisis in Portugal and Italy. According to Melinda Burgess, the euro is selling off as negative reports indicate that the region’s economy is lagging behind. Many investors and analysts are speculating the decline of the yen against the dollar as reports from the US read more than expected figures.
Investors are also looking forward to the results of Italian Prime Ministers meeting with the euro region leaders on discussions about labor laws. Analysts are also waiting to see how the EU region will deal with the emerging news of Portugal debt crisis.
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