Yen rises against dollar on Japan nuclear crisis

AP News
Posted: Apr 12, 2011 3:37 PM
Yen rises against dollar on Japan nuclear crisis

The yen and Swiss franc traded higher against the dollar on Tuesday after Japan boosted the crisis level at the nuclear plant damaged in an earthquake and tsunami a month ago.

Nuclear regulators raised the rating from 5 to 7, the highest level for nuclear accidents, putting it on par with the 1986 Chernobyl disaster.

The dollar was worth 83.75 Japanese yen late Tuesday, down from 84.75 yen late Monday. The dollar fell to 0.8970 Swiss franc from 0.9066 Swiss franc.

The yen and franc are considered safe-haven currencies, and investors tend to buy them during times of international turmoil. Days after the March 11 earthquake and tsunami hit, the Japanese currency soared to a record high against the dollar. The dollar fell as low as 76.32 Japanese yen that day.

Elsewhere, the euro rose to $1.4485 from $1.4429 late Monday on anticipation that the European Central Bank will raise rates faster than the U.S. Federal Reserve. The European Central Bank raised its key interest rate last week, while the Federal Reserve has kept it at record lows.

On Monday, Federal Reserve Vice Chair Janet Yellen said in a speech that the economy is still not strong enough to start changing the central bank's current policy.

Central banks raise interest rates to curb inflation, and higher rates tend to increase demand for the currency linked to that country or region.

In the U.S., the Commerce Department said the trade deficit fell 2.6 percent to $45.8 billion in February mostly because of a big decline in oil imports.

In other trading Tuesday, the British pound fell to $1.6255 from $1.6345 late Monday and the U.S. dollar rose to 96.16 Canadian cents from 95.68 Canadian cents.