The Japanese currency started this week with a more attractive outlook as the Japanese government indicated through several reports, that the Asian nation may be finding its way out of recession, spurring demand for yen, which has been attractive lately only due pessimist global economic indicators.
During the darkest moments of the global slump, the Japanese currency tended to be attractive mostly when investors were looking for a refuge currency, as instability was high and markets extremely volatile. Today, several domestic factors brought the yen up versus most of the main traded currency, as exports expanded, machine orders rose and speculations led investors to believe that a number of Japanese exports repatriated overseas assets, creating a favorable scenario for the yen to benefit from. Machine orders in the Japan were definitely the main factor that brought the yen up today, since it was the first climb in number of orders in four months, which can be understood as an important sign of economic recovery in the region.
Today’s positive day for the yen can be also linked to the return of foreign investors to Japanese stocks, which had a long period of unattractiveness due to the national and global crisis. If the Japanese economy starts indeed to revive, yen is likely to rise, but at a contained pace, decreasing its current high volatility.
EUR/JPY traded at 138.18 as of 10:19 GMT from an opening price of 138.47. USD/JPY followed, from 97.24 to 97.65.
If you have any questions, comments or opinions regarding the Japanese Yen,
feel free to post them using the commentary form below.
Be First to Comment