The Japanese Yen has continued to rise against the US Dollar, posting its biggest monthly advance since 2001 as further deterioration of global stocks prompted investors to unwind their use of the carry trade, funded with low-cost loans from Japan. The Japanese Yen and the Swiss Franc continued to rise in the month of January against the major currencies. ''The yen and Swiss franc are the beneficiaries of risk aversion,'' said Alan Kabbani, a senior currency trader in Charlotte, North Carolina, at Wachovia Corp. ''Equities got hammered, and people are trying to play safe.'' The Bank of Japan (BoJ), currently holds an 0.5 percent borrowing rate which is the lowest among the developed nations, making Japan the prime choice for the carry trade, where an investor gets funds from a country with low borrowing costs and invests in another that offer higher returns, earning between the spread from their interest rate differentials.

In forex trading, the Japanese Yen was heavily supported as investors unwinded the carry trade. The US Dollar in the past week has been put under pressure with heavy rate cuts and fallouts from global stock markets, helping the Japanese Yen's continued rise to 5.1 percent against the Dollar in January. The Japanese Yen has also risen 3.6 percent against the Brazilian Real, 5.1 percent against the Canadian Dollar and 4.3 percent against the Norweigian Krone.