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Yen rises versus the Euro

The Yen reached a two week high on Monday after Koizumi's swapping victory on Sunday's election. Although last week's trade has marked the Yen rising and although most traders speculated that Koizumi will win the election, the overwhelming victory came as a surprise. Koizumi's party has one 296 sits out of 480 total sits in Japan's lower house parliament. It is their first majority in the last 15 years. Such a large majority may speed up the expected reforms, most importantly the reform in the vast postal system.

Experienced traders claim that what's going to influence the Yen mostly is the post-election behavior of Japanese investors and how eager they will be to invest in the U.S dollar and European currencies.

The Euro tumbled versus the Yen as Koizumi's victory reminded many analysts the uncertainty in Germany's upcoming election. As latest polls showed Chancellor Schroeder catching up on Merkel it created doubt regarding the election's outcome an thus tumbling the Euro down versus the Yen and the Dollar. Dollar showed further advance though little changed since Friday's trade. The dollar will keep stabilizing as the Katrina affects will become clearer.

Daniel Carter, Editor. 2005–09–13

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