A top economist for the Wall Street Journal has predicted an upturn in fortune for the euro, claiming that it is currently a safer currency investment than the traditionally favourable Japanese yen.
Writing for the American newspaper, Neil Shah, said the two currencies "seem to have traded costumes" as of the end of last week, and that the single European currency was "acting like a safe harbour amid the ruckus in the foreign exchange markets."
It followed a move by the Japanese government last week of jumping into the currency markets to push down the value of the soaring yen, in a bid to aid Japanese exporters the likes of which had not been seen in six years.
The surprise intervention means that investors are flummoxed as to how far the government will now go and where and when the yen will eventually settle against other international currencies.
Due to the Japanese action, the euro posted a 0.6 per cent rise against the dollar – reaching nearly $1.31, after falling $1.1876 when the debt crisis was at its very worst at the beginning of June. The strengthening meant that worrying signs from bond yields about the situations in Ireland and Portugal were lessened.
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