Forex Special - Most Asian markets are trading on sell tone on Wednesday, with investors confidence dampened by concerns about a global economic slowdown, while shares of Japanese companies suffer on the back of Yen strength, which weighs on their export activity.
Japanese Nikkei Index was trading 1.3% lower by lunch time, while South Korean Kospi Index dropped 0.9%. In Hong Kong, the Hang Seng Index lost 0.3%, while Taiwan's benchmark Index lost 2.1%, and Shangai Composite Index dipped 1.1%.
Stock markets in Asia have followed the path of Wall Street, which closed Tuesday's session with declines between 1.3% and 1.6% as fears about the country's economic recovery losing pace, were confirmed by gloomy existing home sales, which dropped by 27%, twice as much as expected.
Dollar and Yen advance on risk aversion
The Yen soared across the board yesterday, with equity markets in red and economic indicators depicting a grim short-term outlook; USD/JPY decline from Friday's high at 85.80 extended below 8475/90 support area, and the pair accelerated to a fresh 15 year low at 83.60, where the pair found support to bounce up to 84.50 high on Asian trade.
GBP/USD decline from 1.6000 high on early August extended to a fresh one-month low at 1.5370 on European session, and the Pound attempted to bounce up, although, capped at 1.5480 (previous support), the pair pulled down again to move between 1.5400 and 1.5440 during Asian session.
EUR/USD retreat from 1.3335 high on August 6 extended on Tuesday to a fresh 7-weeks low at 1.2585, to bounce up on US session and peak on 1.2720 to ease again to consolidate between 1.2630 and 1.2660m during Asian session.