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The Yen Climbs on Safe Haven Bets

“The yen rose versus a majority of its 16 most-traded counterparts as Cyprus’s banks reopened for the first time since striking a bailout deal that forced losses on some depositors, spurring demand for the safest assets.

Japan’s currency strengthened as the Bank of Japan (8301) reiterated its policy-easing options, damping speculation for additional novel measures to boost the economy. The euro rose against the dollar.

“The yen is stronger partly because of the safety principle,” said Steven Barrow, head of Group of 10 research at Standard Bank Plc in London. “The markets may be sensitive to the news around the reopening of banks in Cyprus. The market is well set up for something reasonably aggressive from the BOJ so the downside risks for the yen against the dollar are limited.”

The yen fell 0.1 percent to 120.86 per euro at 7:43 a.m. New York time, after reaching 119.75, the strongest level since Feb. 27. Japan’s currency gained 0.1 percent to 94.33 per dollar. The 17-nation euro rose 0.3 percent to $1.2815. It touched $1.2751 yesterday, the lowest level since Nov. 21.

The Central Bank of Cyprus’s capital controls will include a 300-euro daily limit on withdrawals and restrictions on transfers to accounts outside the country. Banks opened at midday. They will close at 6 p.m. local time, Yiangos Dimitriou, head of the central bank’s audit department, said yesterday in comments broadcast on state-run CyBC television.

Capital Movements…”

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