Yen rises in Asia as stocks tumble

November 20, 2008
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, TOKYO, November 20 – The yen rose against the dollar and euro in Asian trade Thursday as fresh drops on global stock markets boosted demand for safe-haven investments.

The dollar slid to 95.07 in Tokyo afternoon trade, down from 95.77 in New York late Wednesday. The euro slipped to 1.2493 dollars from 1.2508 and to 118.76 yen from 119.83.

"While the economy spirals down into a bottomless pit, authorities have their hands tied as to what to do," said Kenichi Yumoto, vice president of forex sales at Societe Generale.

Such worries have been supporting the yen as investors see the Japanese currency as a relatively safe haven in the global financial storm.

The yen shrugged off news that Japanese exports dropped at the fastest pace in almost seven years, pushing Asia\’s largest economy deeper into recession.

The US economy continued to churn out bad news. The US consumer price index plunged 1.0 percent in October — the steepest one-month fall since the data was first published in 1947 — stoking deflation fears.

The Federal Open Market Committee signalled in minutes from its October policy meeting that it would make further reductions to its key lending rate, which is already at a record low of 1.0 percent.

Unless pessimistic views about the US economy change, it is "sensible to expect the markets to gradually tilt toward selling the dollar," Bank of Tokyo-Mitsubishi UFJ forex chief Tetsuhisa Hayashi told Dow Jones Newswires.

Dealers were closely watching developments in the car sector as the heads of the Big Three US automakers — General Motors, Ford and Chrysler — appealed to Congress for loans to prevent their industry from collapsing.

The dollar rose to 1.5302 Singapore dollars from 1.5289 on Wednesday, to 1,493 South Korean won from 1,446, to 12,180 Indonesian rupiah from 12,030, to 33.41 Taiwan dollars from 33.26 and to 35.12 Thai baht from 35.01.

The greenback slipped to 49.97 Philippine pesos from 50.03.

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