After 3 days of gains, the Japanese currency weakened against the dollar and the euro before an eventual trade deficit that may be reported by the government for the last month period.
The Japanese currency had consistently risen against the euro during the past five weeks, and as the traders realized it could be overbought, it was the perfect timing for making profits, since the Japanese government will release a report that is very likely to contain negative trade numbers for the past month activities. Despite the substantial rise against the dollar and the euro, the yen could enter a losing trend as Japanese exports are failing to exceed the countrys imports, due to a fall on demand for Japanese products worldwide, a consequence of the global slump.
Currency specialists affirm that the yen may start to suffer shortly the reflections of the Japanese economy weak numbers. Pessimism is currently widespread in Japan, and people fear that conditions might deteriorate even further, bringing the countrys economy to the brink of collapse. It is considerably expected by the analysts that without new trade policies and incentives, the Japanese currency may enter a negative trend.
Despite the yen sudden fall, it was not sufficient to reverse the current bulling trend for the Japanese currency, being the EUR/JPY traded at 126.71 from 127.75. The USD/JPY fell from 98.60 to 98.45.
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