Yen weakens on return to risk

The yen dropped against all major currencies on Tuesday as investors again sought out risk after it looked as if credit markets were easing and as equities markets saw some gains.

The yen traded at ¥109.4250 to the US dollar and at ¥161.0463 to the euro while it was at ¥96.5347 to the Australian dollar, at ¥62.380 to the Brazilian real, and at ¥15.943 to the South African rand in early afternoon trade in New York.

The US dollar also saw losses in relation to most currencies, trading at $1.4718 to the euro on speculation that the Federal Reserve will cut interest rates by as much as half a percentage point when it meets later in the month.

The pound, meanwhile, saw gains against the US dollar, the euro and the yen on Tuesday on sentiment that the Bank of England will be able to avoid cutting interest rates when it meets later in the week and on the news that UK home prices were up 1.3 percent in December over November.

The dollar traded at $1.9739 to the pound at just before 1 p.m. in New York, while the yen traded at ¥215.9992 to the pound and the euro sat at €1.3412 to the pound.

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