FOREX- Yen Rises on Speculation, Dollar Gains highest against Yen, Retreats shortly

Dollar hits one month high vs yen later retreats

The yen rose against the dollar on Monday with demand from Japanese exporters lending support after it earlier hit a one-month low as gains in stock markets pointed to an easing of risk aversion. The dollar hit a one-month high against the yen earlier as the Japanese currency carried over its weakness from Friday, when U.S. shares rallied even as data showed that U.S. job losses in January were the deepest in 34 years
But the dollar later shed its gains against the yen due to selling by Japanese exporters, traders said. The yen advanced versus 14 of the 16 most-active currencies today. Against the yen, Australia’s dollar fell 1.3 percent to 61.23, South Africa’s rand declined 1.3 percent to 9.4747 and New Zealand’s dollar weakened 1.5 percent to 48.24. The dollar fell 0.3 percent against the yen to 91.73 yen .The dollar earlier rose to 92.42 yen on trading platform EBS, its highest since early January. The euro rose 0.1 percent to $1.2946. Against the yen, the euro was 0.3 percent lower at 118.70 yen, having retreated from a three-week high of 119.99 yen hit on EBS earlier in the day. The pound fell for the first time in five days against the dollar after the Confederation of British Industry also said Prime Minister Gordon Brown’s government must act quickly to revive lending as businesses battle the worsening credit squeeze.

U.S. financial stability plan to be outlined on Tuesday

In the near term, currencies are seen likely to take their cues from how the stock market reacts to President Barack Obama's financial stability plan, to be outlined by Treasury Secretary Timothy Geithner in a speech on Tuesday. The stabilization steps were initially due to be unveiled on Monday today, but the Obama administration pushed back the announcement as it pressed lawmakers to settle their differences over a huge economic stimulus package. The dollar broke above the triangle pattern against the yen on technical charts late last week, suggesting it has more room to rise.