Japanese yen rose against major counterparts as Prime Minister Naoto Kan said on Tuesday that the danger of more radiation leaks from the damaged nuclear plant is increasing, spurring speculation over domestic investors bringing back overseas assets.
Japan’s currency advanced to 113.46 against euro in Tokyo from 114.22 in New York yesterday. The yen gained to 81.50 per dollar from 81.63.
Japanese stock markets slumped for the second day on Tuesday on escalating fears of a nuclear crisis after a radiation leak was detected at the Fukushima Dai-Ichi nuclear plant.
Benchmark Nikkei index slumped 10.55 percent or 1,015.34 to 8,605.15 after plunging 6.18 percent in the previous session. Meanwhile, the Topix index plunged 9.47 percent to 766.73 and recorded its worst two-day slump since 1987.
However, the dollar advanced as a safe haven following the reports of further radiation leaks from the nuclear plant. The greenback rose 0.5 percent to $1.3922 against euro.
“The developments in Japan are clearly yen-positive because you have the normal reaction of Japanese investors taking money home,” Bloomberg reported quoting Thomas Harr, head of Asian foreign-exchange strategy, Standard Chartered Plc. “The dollar is benefiting against emerging-market currencies because it’s a safe haven.”
The dollar index, which measures the performance of the greenback against a basket of six other major currencies, was up 0.4 percent to 76.678. The index had reached a low of 76.30 on Monday.
Swiss franc climbed 0.6 percent to 1.2863 against euro, as traders rushed for safe haven currencies.