The U.S dollar was down heavily against the Japanese Yen today, reverberating the shift of market sentiment towards safe assets. The greenback fell by more than 0.53% against the yen to 115.23 as it breached its lowest levels in the last year. The weakness in the dollar is seen as a response to gloomy global economic data coupled with a negative sentiment prevalent in the markets over the last two days.
Yen gains strength
The USD/JPY pair touched lows of 114.23, last seen in November 2014 before climbing back up. The yen gained strength after Japan’s Nikkei shed close to 5.5% during today’s trade, generating worries about what the Bank of Japan can possibly do next following an announced negative interest rate policy.
The dollar remained weak against a range of currencies including Swiss franc, also considered a safe haven in risky times. The USD/CHF pair was steeply lower by 0.33% to 0.9838 after it hit a two-month low at 0.9824. The Aussie dollar, however, was down. Tepid business confidence in Australia had sent the the AUD steeply lower by 0.65% to 0.7042 against the US dollar.
Health of European Banks Questioned
While the euro traded flat agains the dollar at 1.1193, there are ongoing concerns in the Eurozone for the health of major European banks, most notably Deutsche Bank (NYSE:DB) and Credit Suisse Group (NYSE:CS). Such fears pushed investors to unload their financial stocks a day earlier and helped keep European and U.S. markets in negative territory yesterday.
According to data released today, German industrial output in December declined 1.2%, which came as a rude shock to the markets. The data has further aggravated the concerns about the economy, which closed 2015 on a negative note. The data forced the euro lower against the yen, falling by as much as 0.54% to 128.98.
Elsewhere, the British pound remained resilient against the dollar. GBP/USD pair added more than 0.10% to 1.4446 on Tuesday. The U.S. Dollar index is mostly unchanged this morning after falling sharply yesterday.