Investing.com – The euro surged to a 10-month high against the broadly weaker yen on Tuesday, as speculation over possible yen repatriation in the wake of the March 11 earthquake and tsunami subsided.
EUR/JPY hit 116.05 during European late afternoon trade, the pair’s highest since May 14, 2010; the pair subsequently consolidated at 115.85, gaining 0.69%.
The pair was likely to find support at 114.15, Monday’s low and resistance at 117.01, the high of May 14, 2010.
The yen has come under pressure in recent days as Japanese exports slumped after the March 11 disaster caused production slowdowns as parts supplies dried up. Meanwhile, importers look likely to step-up buying of materials for reconstruction, which could result in a narrower Japanese trade surplus.
Japan’s current-account surplus reduces the country’s dependence on borrowing abroad and supports the yen.
The single currency remained well supported after European Central Bank President Jean-Claude Trichet said Monday that inflation in the euro zone was "durably" above the central bank's target, underlining the view that the bank will raise interest rates in April.
The euro was also up against the Swiss franc, with EUR/CHF gaining 0.25% to hit 1.2947.
Also Tuesday, ratings agency Standard & Poor's downgraded the credit ratings of both Portugal and Greece.
EUR/JPY hit 116.05 during European late afternoon trade, the pair’s highest since May 14, 2010; the pair subsequently consolidated at 115.85, gaining 0.69%.
The pair was likely to find support at 114.15, Monday’s low and resistance at 117.01, the high of May 14, 2010.
The yen has come under pressure in recent days as Japanese exports slumped after the March 11 disaster caused production slowdowns as parts supplies dried up. Meanwhile, importers look likely to step-up buying of materials for reconstruction, which could result in a narrower Japanese trade surplus.
Japan’s current-account surplus reduces the country’s dependence on borrowing abroad and supports the yen.
The single currency remained well supported after European Central Bank President Jean-Claude Trichet said Monday that inflation in the euro zone was "durably" above the central bank's target, underlining the view that the bank will raise interest rates in April.
The euro was also up against the Swiss franc, with EUR/CHF gaining 0.25% to hit 1.2947.
Also Tuesday, ratings agency Standard & Poor's downgraded the credit ratings of both Portugal and Greece.