Yen Rises Driven by Worries Over Greece

 
   By Kosaku Narioka 
 

        The Japanese yen rose against other major currencies Tuesday in Asia as continued concern over Greece's future in the eurozone increased demand for safe-haven assets.
        While the jitters that roiled global markets and drove the yen higher Monday eased somewhat, the worries over the Greek situation continued to simmer, with the nation preparing for a referendum on its creditors' austerity measures Sunday.
        During times of market stress, investors tend to park their money in assets they believe are more likely to maintain their value through periods of instability--such as the yen--and shift out of riskier investments such as stocks and higher-yielding currencies.
        "Uncertainty will likely continue for the rest of the week," said Shinji Kureda, head of FX trading at Sumitomo Mitsui Banking Corp.
        Over the weekend, Greece said it would call the referendum and close its banks temporarily, surprising many market participants who had expected Athens to reach a bailout deal with its creditors by Monday.
        Mr. Kureda said many market participants are still expecting Greek voters to accept the austerity measures in the referendum and choose to remain within the common-currency zone.
        "If they say 'No,' Greece's exit will come clearly into sight, prompting risk-off trading," leading to further yen gains, he said.
        The dollar fell to Y122.27 as of 0540 GMT from Y122.54 late Monday in New York, according to EBS. The euro dropped to $1.1196, compared with $1.1237, and to Y136.90 from Y137.81. The Australian dollar declined to Y93.84 from Y94.11.
        In the nearer-term, market participants are focusing on Tuesday's deadline for Greece to pay back a loan from the International Monetary Fund. Some say Greece is able to make that payment, but Athens has said it won't be able to.
        A meeting of the European Central Bank's Governing Council on Wednesday will also be closely watched, with leaders expected to discuss the Greek situation.
        "(The euro) will likely continue to fluctuate in reaction to headlines," said Shigetake Nakayama, chief manager of the foreign exchange trading department at Bank of Tokyo-Mitsubishi UFJ.
        Write to Kosaku Narioka at kosaku.narioka@wsj.com
        (END) Dow Jones Newswires

        June 30, 2015 01:46 ET (05:46 GMT)

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