Yen to Extend Gains as US Data Underpins QE3 Reduction Bets
The Japanese Yen soared in overnight trade, adding as much as 2.1 percent on average against its leading counterparts, as risk aversion gripped Asian stock exchanges and prompted an unwinding of carry trades funded in the perennially low-yielding currency. The MSCI Asia Pacific regional benchmark index slid 3.6 percent in a move the newswires chalked up to hints of near-term QE3 reduction from Fed Chairman Ben Bernanke and a disappointing Chinese Manufacturing PMI report. Figures from HSBC suggested factory-sector activity unexpectedly contracted for the first time in seven months in the world’s second-largest economy.
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