Yen hits World War II high against dollar
NEW YORK – The Japanese yen on Wednesday hit its highest level against the dollar since World War II, trading at 79.73 yen to a dollar as investors examined the impact of Japan’s disastrous earthquake and tsunami.
Analysts said that heavy repatriation of funds to help the stricken country could be one factor in the yen’s rise.
“Although there will likely be massive damage to the Japanese economy, we do not view the event as a yen-weakening factor in the near term due to the special importance of risk sentiment as a determinant of Japanese capital flows,” Nomura Global FX Research analysts said in a client note.
“Risk aversion implies weaker capital outflows, and since Japan is a net creditor, risk aversion can even cause repatriation of money invested in overseas assets.”