“The yen gained for the first time in three days against the euro and dollar as a report showed economic confidence in the euro region fell in April, boosting demand for the safety of the Japanese currency.
The pound strengthened to the highest level in more than seven months against the greenback after U.K. consumer confidence climbed more than economists estimated. The yen reversed two days of declines even before the Bank of Japan (8301) meets tomorrow, with economists saying policy makers will unveil new easing measures. The implied volatility of three-month options for Group of Seven currencies fell to its lowest level in more than four years.
“Yen direction will remain mainly driven by safe-haven demand linked to developments in the euro zone,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “The yen’s sell off on the back of BOJ easing speculation was overdone. If the euro-zone debt crisis continues to reintensify, then it is likely the yen will strengthen further despite ongoing easing.”
The yen gained 0.5 percent to 80.91 per dollar at 7:43 a.m. New York time. It strengthened 0.6 percent against the euro, to 106.92. The U.S. currency was little changed at $1.3215 per euro after reaching $1.3263, the weakest level since April 3…”
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