Yen gains on risk aversion

The yen gained on many major currencies Tuesday as investors pulled away from risky carry trades financed by the Japanese currency while the US dollar strengthened in relation to the euro, pound and South African rand on a gain of 1.2 percent in wholesale prices that hinted that the Federal Reserve should raise US interest rates beyond their current level.

In late morning trade in New York the yen traded at ¥161.6358 to the euro, at ¥109.7100 to the greenback, at ¥204.6378 to the pound and at ¥95.3051 to the Australian dollar while the US dollar traded at $1.4733 to the euro.

The pound was weaker versus the euro and the US dollar after an official of the Bank of England said that UK inflation will drop next year, leading to an expectation that interest rates there will be lowered.

The UK currency traded at 78.99p to the euro at late morning in New York, while it took $1.8653 to buy a pound.

Meanwhile, the South African rand weakened after gold and platinum prices dropped, and even though a government report showed that the South African economy expanded at an annual rate of 4.9 percent in the second quarter, mostly on mining and manufacturing.

By late morning in New York the rand traded at R7.8125 to the US dollar and at R11.507 to the euro.

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