Yen hits 16-year high against dollar
Updated: 11:57, Thursday March 17, 2011
The yen on Wednesday rose to its highest level against the dollar since 1995
as the Japanese currency benefited from safe-haven sentiment,despite the
deepening nuclear emergency.
At 1615 GMT the Japanese currency stood at 80.03 yen to the dollar, the
strongest level since 79.75 yen hit on April 14 1995, which was a postwar
Despite Japan's nuclear crisis worsening on Wednesday, with another fire at a
quake-hit atomic power plant and a radiation spike there that forced the
temporary evacuation of workers, the yen has been boosted by a number of
'The deteriorating Japanese nuclear crisis and ongoing worries about the cost
of restructuring of the Japanese economy after the huge earthquake are
fuelling fears of a repatriation by Japanese funds,' said analyst Nick
Stamenkovic at RIA Capital Markets.
Many Japanese have also engaged in carry trades in which they make
investments in higher yielding currencies, and the unwinding of these is also
helping the yen, Stamenkovic noted.
'Even so the growing threat of BoJ (Bank of Japan) intervention should lessen
upward pressure on the yen near-term. Indeed, the central bank will probably
want to draw aline in the sand around 80 yen to the dollar,' he said.
For the third straight day the Bank of Japan on Wednesday pumped
emergency funds into the financial system. It offered 5.0 trillion yen ($US61.8
billion) for money markets as part of a total pledge of 13.8 trillion across other
The central bank put up eight trillion yen in same day funds on Tuesday and a
record 15 trillion on Monday to soothe sentiment and ensure firms can access
cash. It has doubled to 10 trillion yen an earlier asset purchase scheme.