(RTTNews) - Tuesday in Asia, the yen soared against other major currencies as a slide in Asian stocks boosted demand for the safe-haven Japanese currency.
The yen climbed to a 4-day high against the pound and the franc and fresh multi-week highs against the rest of majors.
Asian stocks fell today on signs that the global economic recovery is slowing and investors also remained cautious ahead of European debt sales this week.
Japan's Nikkei 225 index fell 1.4%, Hong Kong's Hang Seng lost 1.1%, China's Shangai composite index fell 3.3%, New Zealand's NZX 50 index slipped 0.6%, South Korea's Kospi declined 1.5% and Taiwan's main index plunged 1%. Australia's S&P 200 index and the All Ordinaries index dropped 0.9% each.
World stock markets plunged this year as investors aggressively removed themselves from risk due to a number of factors such as mounting worries about the euro zone's fiscal crisis, falling commodity prices and uncertainty about the global economic outlook.
Riskier assets such as the higher-yielding Australian and New Zealand dollars also came under selling pressure, with traders unwinding leveraged carry trades and moving funds to the U.S. dollar, the yen and the Swiss franc, which are considered as safe-haven assets in times of volatility.
Japan's unemployment rate rose for the third straight month in May, up a seasonally adjusted 0.1 percentage point from April to 5.2%, the Internal Affairs Ministry reported today. This was slightly higher than forecasts for 5%, following the 5.1% rise in April. The number of employed persons eased 0.7% on year to 62.95 million.
Meanwhile, a separate report from the Ministry of Economy, Trade and Industry showed that industrial production in Japan fell a seasonally adjusted 0.1% in May from the previous month. This was below expectations for a flat reading following the 1.3% increase in April.
On an annual basis, industrial output jumped 20.2%, roughly in line with expectations for a 20.3% increase following the 25.9% spike in the previous month.
The yen rose against the euro in Asian deals on Tuesday. The euro-yen pair that closed yesterday's trading at 109.72 reached 108.63 at 1:10 am ET. This set the highest level for the Japanese currency since June 08. If the yen advances further, it may likely target the 108.1 level. As of now, the pair is worth 108.76.
The yen gained 19% against the euro this year and reached more than an 8- 1/2 -year high of 108.10 on June 07, as Greek woes continued to haunt the euro. Although the yen lost 5% thereafter, it rebounded after falling to near a 3-week low of 113.43 on June 21.
