The Japanese yen rose against most of its major counterparts, as investors increased demand for the safe heaven currencies after fears spread over the FOREX market regarding any retaliatory terrorist attacks by al Qaeda after the death of their leader, Osama bin Laden.
Risk aversion found its way back into financial markets, as Asian stocks declined and the dollar was able to rise versus higher-yielding currencies. Most of the countries around the world declared a state of emergency, fueling risk aversion and low demand for higher assets.
On the other hand, the Japanese parliament approved a 4 trillion yen ($49 billion) for rebuilding plans, while Japan’s car sales fell 51%, adding more pressures on the Japanese government to get the economy out of the quake aftermath.
Japan’s wages slid for the first time in 13 months in March, confirming that slumping
Consumer spending could undermine the economic recovery, but there are some expectations that the quake’s impact on wages will moderate in coming months.
On Wednesday, the US economy will release at 12:15 GMT the ADP employment change and expected to show 200,000 new private sector jobs in April, from a 201,000 the previous month.
The ISM Non-manufacturing composite is also due on Wednesday and will also continue to affect the market. The index is due for release at 14:00 GMT and is expected with expansion to 57.8 in April from 57.3 during March.
Written by ForexMansion.com