Yen stronger on US financial sector woes

The yen gained strength Friday after bailout talks faltered among US lawmakers after some Republican legislators refused to back the plan and after US savings and loan Washington Mutual (NYSE: WM) failed, becoming the biggest US bank to fall in US history.

Regulators took over the bank on Thursday and it was sold to JPMorgan Chase (NYSE: JPM) for $1.9 billion dollars.

The greenback was hurt not only by the ban failure and the inability for lawmakers to agree on a bailout plan for the larger financial sector, but by increased sentiment that the Federal Reserve will cut US interest rates when it meets in October and by new numbers showing that the US economy did not grow as rapidly in the second quarter as previously thought.

In late morning trade in New York, the yen had lost some of its gains versus the US dollar, trading at ¥106.1 to the greenback while it traded at ¥154.7945 to the euro, at ¥57.287 to the Brazilian real and at ¥87.9145 versus the Australian dollar.

The dollar traded at $1.4589 to the euro just before noon in New York.

Meanwhile, the pound was slightly stronger in relation to the greenback and the euro, with the pound trading at 79.28p to the euro at just about noon in New York, while it took $1.8405 to buy a pound.

Story link: Yen stronger on US financial sector woes