Forex - EUR/JPY extends gains as bottom fishers push unit higher

Published 09/25/2012, 09:38 PM
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Investing.com - The euro rose against the yen on Wednesday as investors continued to view the single currency as oversold versus the safe-haven Japanese currency, buoyed as well on bullish comments from Germany's finance minister.

Weak German business sentiment figures caught investors off guard earlier this week, sparking a euro selloff.

In Asian trading on Wednesday, EUR/JPY hit 100.43, up 0.07%, up from a low of 100.25 and off a high of 100.47.

The pair sought to test support at 100.17, Tuesday's low, and resistance at 101.05, Tuesday's high.

The euro dropped earlier this week after the Ifo institute said its business climate index for Germany fell to its lowest level since March 2010, stoking concerns that the European debt crisis was escalating in Europe's largest economy.

The Ifo index fell to 101.4 in September from 102.3 in August, the fifth consecutive monthly decline and well below expectations for a 102.5 reading.

Ongoing uncertainty as to whether Spain will seek a bailout prompted investors to seek safety in the yen and greenback as well in recent sessions.

Bottom fishers, however, jumped in earlier this week and continued to snap up positions on Wednesday, boosting the single currency.

German Finance Minister Wolfgang Schauble said earlier that European policymakers should do everything in their power to protect the single currency, pointing out that defending the euro was "worth any effort."

Talk that lawyers in Germany are examining the legality of the European Central Bank's bond purchasing program offset Schauble's bullish comments for the euro, though the single currency continued to post gains against the yen.

The euro, meanwhile, was down slightly against the pound and up against the Canadian dollar, with EUR/GBP trading down 0.01%  at 0.7967 and EUR/CAD trading up 0.07% at 1.2659.

Later Wednesday, Germany will publish preliminary consumer price index data.









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