Yen gains as sterling declines

The yen benefited from the flight from risk and strengthened on Monday to a one-and-a-half year high versus the US dollar.

The yen traded at ¥109.8450 to the dollar in afternoon trade in New York, while it was at ¥159.7476 to the euro, ¥114.0240 to the Canadian dollar and at ¥97.1688 to the Australian dollar.

Conversely, sterling weakened as worries about the credit crisis increased and after Morgan Stanley cut its rating on HSBC (LSE: HSBA; NYSE: HBC; Euronext: HSBC; SEHK: 005) from “overweight” to “equal weight” on the possibility that it will have more losses related to the US subprime mortgage crisis.

The pound was at ¥226.4070 versus the yen in afternoon trade in New York, around a three-month low, while it took $2.0612 to buy a pound after trading at $2.0588 to the pound earlier in the session, a three-and-a-half year low against the greenback.

Story link: Yen gains as sterling declines