Dollar leaps after Bank of Japan sells yen

AP News
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Posted: Oct 31, 2011 4:53 PM
Dollar leaps after Bank of Japan sells yen

The dollar rose sharply against the yen Monday after the Bank of Japan weakened its currency to help Japanese exporters.

The Bank of Japan says it sold yen and bought dollars during Tokyo trading Monday in order to pull the yen down from a post-World War II high against the dollar. The strong yen was hurting Japanese exporters by making their goods more expensive for overseas customers.

The dollar jumped to 78.05 Japanese yen late Monday from 75.75 yen late Friday. Earlier, the dollar was worth 79.52 yen, its highest level since Aug. 4.

Traders have been buying yen because it is seen as a safe place to store cash during times of global turmoil. Its biggest rivals, the euro and the U.S. dollar, have been less stable in recent months because of the European debt crisis and the uncertain U.S. economy. Japan's currency has risen 7 percent against the dollar since the beginning of the year.

Meanwhile, concerns about Italy escalated after the yield on the country's 10-year bond rose above 6 percent. That indicated investors' confidence in the country's financial prospects is declining.

The euro fell to $1.3924 from $1.4153. The euro is down 2.3 percent against the dollar since hitting a seven-week high of $1.4246 Thursday after European leaders reached a deal on a plan to help the region contain its debt crisis.

The Bank of Japan intervention also sent the dollar higher against most other currencies. The dollar rose to 0.8736 Swiss franc from 0.8621 Swiss franc and to 99.41 Canadian cents from 99.34 Canadian cents.

The U.S. dollar was also higher against the Australian, New Zealand and Hong Kong dollar, and against currencies in Latin America.

The British pound rose to $1.6129 from $1.6119.