Yen hits 5-week high vs dollar on risk aversion

       The yen rose broadly yesterday, hitting its highest level in more than a month against the dollar and sterling as a slide in Asian stocks raised concerns a risk rally in past months may have been overdone.
       The Japanese currency climbed to a five-week high against the dollar and made inroads against high-yielders including the Australian and New Zealand dollars.
       European shares were slightly lower on the day, giving up early gains. Shanghai stocks, which have been a driver of risk trades in past weeks, dropped 0.7%.
       The yen is strengthening today on doubts about the view that China will pull the global economy out of recession,said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt.
       Some in the market said a report that Chinas sovereign wealth fund would increase new foreign investment this year by around 10 times from last year, and was exploring investment in Japan, was also a support factor for the yen.
       By 0925 GMT, the dollar traded 0.6%lower at 93.65 yen, having fallen as low as 93.37 yen on electronic trading platform EBS, its lowest since July 22.
       The yen rallied across the board, pushing sterling down roughly 1% on the day to around 151.40 yen, its lowest since mid-July. The euro and Australian and New Zealand currencies fell more than half a percent on the day against the Japanese currency.
       Despite its losses against the yen, the dollar gained against the euro, which slipped 0.3% to $1.4250. Risk aversion pushed the Australian and New Zealand dollars each down 0.5% against the US currency.