The yen started the new trading weak by weakening against most major counterparts Asian bourses rose and risk aversion was slightly off. The MSCI Asia Pacific regional benchmark equity index rose 0.3 percent. This dampened demand for the safe haven yen, causing it to underperform.
The main driver behind better sentiment was due to China’s Premier Wen Jiao Bao comments. Wen said the Chinese government will maintain an active fiscal policy focused on stabilizing economic growth. This helped give some boost to risk appetite on hopes that China will undertake stimulus measures to boost its own performance and by extension that of the global economy at large.
The uptick in risk appetite also dampened demand for the other safe haven currency, which is the US dollar. The greenback underwent some selling pressure against risk currencies and growth-linked currencies like the Australia and and Canadian dollars.