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Yen rises on tax hike delay; Brexit worries pummel pound

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The yen rose on Wednesday, buoyed by Japan's delay of a sales tax rise, and the pound fell over uncertainty about whether Britain will vote to stay in the European Union.

[NEW YORK] The yen rose on Wednesday, buoyed by Japan's delay of a sales tax rise, and the pound fell over uncertainty about whether Britain will vote to stay in the European Union.

Japan's prime minister, Shinzo Abe, gave the yen a boost with his decision to postpone to 2019 a long-planned sales tax increase amid fears it would hurt the limping economy.

The yen surged 1.1 per cent against the dollar to 109.53 around 2100 GMT, and was up 0.6 per cent against the euro at 122.52 yen.

The euro and dollar meanwhile advanced against the pound after polls increasingly showed British voters more in favor of quitting the 28-nation EU ahead of the June 23 referendum.

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Market voices on:

"In a case of deja vu... two further Brexit polls have weighed on the pound, as the currency's sensitivity seemingly increases as the referendum date approaches," said XTB analyst David Cheetham.

Investors are also cutting their risk exposure ahead of a May US jobs report and the outcome of meetings by the Opec oil cartel and the European Central Bank on Thursday.

"Market participants are making the choice to pocket their gains ahead of big macroeconomic events at the end of this week," said analyst Yoav Nizard at FXCM currency brokerage.

Euro-watchers will be focused on the European Central Bank's meeting on Thursday, particularly on ECB President Mario Draghi's post-meeting comments, as the bank is expected to leave its ultra-loose policy unchanged.

AFP

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