Yen currency exchange rate strengthened

The currency exchange rate of the yen has surprisingly strengthened despite the catastrophic consequences of the recent earthquake and tsunami.Chris Towner, director of FX advisory services at HiFX, said that the trading environment in the foreign exchange markets has been stable.He added that this is in contrast to the stock markets, which saw global stocks hit a two-and-a-half-month low.However, the main reasons for the stability of the yen's currency exchange rate are the fact that it has a risk-averse reputation, the insurance market in-flows into the Japanese yen to meet the huge claims and the vast repatriation of large multi-national companies in order to start re-building.Mr Towner added that sterling is not expected to weaken aggressively as a result of the natural disaster, however, he noted that the pound is expected to "trade on the back foot over the next few weeks", helped by the uncertainty allowing the Bank of England to hold off from raising interest rates imminently.

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