Aug. 1 (Bloomberg) -- The yen fell from a three-month high versus the euro after U.S. stocks rallied, allaying concern that losses in subprime mortgages will hurt credit markets and growth.
The Japanese currency earlier gained against the euro and dollar as investors cut riskier assets funded by loans in Japan, a practice known as the carry trade. At 0.5 percent, Japan has the lowest interest rate among industrialized nations. The U.S. subprime debacle has led traders to sell stocks and bonds in countries such as Turkey, Iceland and Brazil.
``We are seeing a temporary relief after the sell-off overnight in riskier assets,'' said Samarjit Shankar, director of global strategy for the foreign exchange group in Boston at Bank of New York Mellon. ``The market is reassessing the contagion from the credit market. It isn't clear how bad the subprime problem is and its impact on other sectors.''
The yen declined 0.3 percent to 162.71 per euro at 10:22 a.m. in New York. The Japanese currency earlier touched 160.47, the strongest since April 24. The yen also traded at 118.70 per dollar, from 118.61 yesterday. The Japanese currency earlier climbed to 117.60 per dollar, breaching the 118 level for the first time since April 19.
from 4xfindme
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