The Yen rose broadly in quiet trade on Monday as continued uncertainty over the fallout from the US credit market turmoil caused investors to reduce exposure to risky carry trades.

US stocks fell on concerns about the impact of the housing slump, boosting the Japanese currency. Investors tend to price risk perception through equity markets and there is a negative correlation between stocks and the Yen.

The latest credit casualties outside the United States include four Norwegian municipalities hit by losses on US investments and German state-backed regional lender WestLB, which will see a loss of up to € 1 billion this year.

Yesterday, UsdJpy was down 0.72% at 110.43, having touched to a session low of 110.13. End last week, UsdJpy rose up to 111.23, its highest level since mid-November. EurJpy traded down 0.5% at 161.97, while UsdChf dipped 0.17% to 1.1273. AudUsd fell 0.42% to 0.8807.

FX traders also pointed to a report by Moody's Investors Service on Friday that it may be preparing a series of credit-rating cuts related to sub-prime mortgages that may impact over $100 billion worth of securities.

The Dollar briefly pared losses against the Yen after US Treasury Secretary Henry Paulson said the government is close to brokering a comprehensive mortgage aid plan that will shepherd many troubled sub-prime borrowers into safe and sustainable loans.

EurUsd rose 0.23% to 1.4667 recovering some ground after posting its biggest weekly percentage fall in more than three months.

The expected rate cuts boosted confidence that the Fed would keep the US economy from recession, igniting gains in stock markets and briefly shifting market focus from a narrowing yield advantage. Investors didn't want to take bigger risks before euro zone and British interest rate decisions this week and a closely watched US jobs report that may help determine the extent of US monetary policy easing next week and in the New Year.

The European Central Bank is expected to hold its key rate at 4 percent on Thursday.