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Dollar jumps vs yen after Japan's debt rating cut

Dollar jumps vs yen after Japan's debt rating cut

The dollar jumped against the Japanese yen Thursday after ratings agency Standard & Poor's cut Japan's credit rating because of the Asian country's deepening debts, but hit another 2-month low against the euro and lost ground against the British pound.
In morning trading in New York, the dollar rose to 82.89 Japanese yen from 82.45 late Wednesday.
S&P cut Japan's debt rating to AA-, the fourth-highest level, from AA. Japan's debt is already twice the size of its GDP and is likely to keep growing over the next decade, S&P said. High debt levels have pushed up borrowing costs for Europe's most indebted nations and forced a rescue of Greece and Ireland.
Still, S&P's cut brings its rating in line with the rating of rival agency Fitch, currency analysts from Brown Brothers Harriman said, adding the dollar's bounce would likely be limited. The dollar has already retreated from its overnight high of 83.20 yen, and is still trading not far off its post-World War II era low of 79.75 yen, struck in 1995.
The euro, meanwhile, continued its rally of the past two weeks, notching a fresh 2-month high of $1.3759. by midmorning in New York, it was worth $1.3733, up from $1.3687 late Wednesday. The euro has moved higher since mid-January after a two-month decline. Foreign-exchange analysts say that investors now hope that European officials have finally gotten a handle on the European debt crisis which has weighed on the shared currency.
In other trading Thursday, the British pound rose to $1.5964 from $1.5885. The dollar gained to 0.9455 Swiss franc from 0.9438 franc but dipped to 99.35 Canadian cents from 99.55 Canadian cents.


Updated : 2021-01-17 02:19 GMT+08:00