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Yen Climbs After Japan's Abe Announces Sales Tax Hike Delay

Posted by Chris Advincula on Jun 1, 2016 7:02:53 AM

(Jun 1 Reuters) The yen rose more than 1 percent against the dollar and was firmer against most major currencies on Wednesday after Japanese Prime Minister Shinzo Abe announced a delay in a planned sales tax hike and flagged risks to the global economy.

The dollar fell to a day's low of 109.55 en against the safe-haven currency, having started the European trading session at around 109.90 yen. The euro was also down 0.75 percent against the Japanese currency at 122.35 yen.

The postponement of the sales tax hike triggered a round of profit-taking in bearish yen positions by traders who had been betting on the delay. Abe said the tax increase would be delayed by 2-1/2 years, putting plans for fiscal reform on the back burner amid weakness in the economy.

Subdued risk sentiment and worries about whether Britain will vote to stay in the European Union or not later this month also buoyed the yen.

(Reporting by Anirban Nag, Editing by Jemima Kelly)



Topics: Japanese Economy, Japanese Yen, Forex Trading, USD/JPY, Fundamentals, BOJ. Fed


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