Reply #42: Yen Climbs on Bank of Japan Rate Speculation, Stocks Decline

[54anickel]

http://www.bloomberg.com/apps/news?pid=20601083&sid=acnuysmAb5fE&refer=currency

April 19 (Bloomberg) -- The yen climbed on speculation the Bank of Japan will raise interest rates and as investors sought a haven from slumping world stock markets.

The currency gained the most this month against the euro after a Japanese report today showed demand for services unexpectedly gained, adding to evidence of stronger growth. It also advanced against the pound and the Australian dollar after a slide in Asian and European stocks caused traders to pare investments in higher-yielding currencies funded in yen.

``We've seen a sharp hit on the stock markets this morning,'' Simon Derrick, chief currency strategist at Bank of New York, said in London. ``Were that to feed through into a rise in risk aversion that would strengthen the yen as people pull back from'' the carry trade.

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Figures from the Washington-based Commodity Futures Trading Commission show the difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain -- so-called net shorts -- was 64,841 on Apr. 10, the highest since Feb. 27.

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