Investors are speculating that the sales drop will continue and therefore they are selling high-yielding assets and paying back low-cost loans in Japan’s currency. Daniel Kruger and Michael J. Moore for Bloomberg report the yen climbed against the Australian and New Zealand dollars today on bets that a Group of 20 nations summit this weekend will fail to reach a consensus on resolving the credit crisis, depleting carry trades.
The yen rose 1.5% vs. the dollar this week, its biggest gain since Oct. 24, and advanced 2.1 % against the euro.
CurrencyShares Japanese Yen (FXY) is up 13.7% year-to-date.
Meanwhile, gold futures have had a rally of their own,up to $47 per ounce as of Friday, shining up the appeal of other precious metals. The dim outlook for the global economy is mixing with the recent losses on Wall Street, creating a new demand for the metal.
Myra P. Saefong and Polya Lesova for MarketWatch report gold for December delivery tapped a high of $752 an ounce, climbing as much as 6.7% overnight in electronic trading on Globex. The metal is on pace for a 1% gain for the week. Midday today, silver futures jumped 7.8%, platinum was up almost 4% and copper soared 5%.
Agriculture and metal commodities, along with energy, are going to be the least affected by the stunted global growth, says Morgan Stanley. The investment bank says gold may climb above $1000 per ounce in 2011 as global mine output will drop, mining costs rise and global demand strengthens.