Thursday, August 30, 2007

Yen Rebounded on Credit Crunch

The yen advanced against high-yielding currencies, recovering after yesterday¡¯s sharp slide, as several bad news related to credit market raised risk aversion.

An Australia hedge fund, Basis Yield Alpha Fund, collapsed today because of US home loan defaults. New Zealand-based Five Star Consumer Finance Ltd. also filed bankruptcy today. Those negative news added to worries over the subprime and credit market. Large amounts of hedge funds suffered huge losses from securities backed by US home loans.

The Australian dollar fell from 95.70 to as low as 93.67 versus the yen. The dollar was trading in high 115 versus the yen during the US trading session today.

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