Safe Currency Needed, Yen is Considered

The Japanese yen jumped unexpectedly against the U.S. dollar, the euro and most other majors by the end of this week as the drowning risk sentiment prompts the investors to look for the safer currency.

The greenback has lost its appeal as the safe currency as the U.S. stocks dropped after the Goldman Sachs Group Inc. was sued for the fraud. The concern about Greece and its budget deficit remains while speculation that the country will be forced to activate the rescue package, provided by the European Union and the International Monetary Fund, persists, arousing the uncertainty in the European markets.

The attractiveness of the higher-yielding assets wasn’t helped by the China’s decision to cool its economy either. Previously the yen fell on the outlook that the economic recovery will boost the demand for the higher-yielding assets, but it seems that the investors now prefer the safety more than high profits.

USD/JPY closed this week at 92.10 after opening at 93.08 and reaching its highest level of 93.70. EUR/JPY closed at 124.42 after it opened at 126.84. GBP/JPY closed at 141.76.

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