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Currencies: A Weak Yen Gets Weaker

A weak yen is getting weaker this morning.

With little political news to instigate the fall, the latest drop stems from general ill-sentiment about the Japanese currency compared to the dollar and the euro.

"It's a large amount of selective amnesia," said Steve Barrow, currency strategist at

Bear Stearns

in London, referring to news of the resignation of Secretary-General Hiromu Nonaka of the Japanese Liberal Democratic Party. The resignation, which casts doubts about the security of fellow party member Prime Minister Yoshiro Mori's reign, should have had a positive effect on the yen, rather than what is occurring this morning. That's because the resignation signifies that Mori, who recently survived a vote of no confidence, may be out of office soon. And his departure would bolster the yen.

In what is "really a weak yen story today," according to Barrow, the yen hit 15-month lows against the dollar and three-month lows versus the euro. The dollar/yen was recently trading at 111.88, up from a close of 110.39 yesterday. The euro/yen cross was trading at 97.70, up from 96.26 at yesterday's close.

"The market's move towards the dollar has soured", said Barrow, as has its opinion of the yen. "The euro is just piggybacking on top of that." The dollar continued to fall against the euro this morning, with the euro recently at $0.8732, up slightly from yesterday's close of $0.8722. This marks the sixth consecutive day of euro gains against the dollar -- the longest euro rally in over a year.

The Canadian dollar is gaining slightly on the U.S. dollar this morning, with the U.S. dollar recently trading for C$1.5310, down from C$1.5362 yesterday.

The Australian dollar is also gaining on the U.S. dollar this morning, hitting a recent price of $0.5353 and up from a $0.5283 at the close yesterday. The British pound is following the rest of the global community and gaining on the dollar, recently at $1.4335, up from yesterday's close of $1.4259.

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