Japanese Yen Benefits from Uncertainty on Markets

The Japanese yen strengthened today against most other major currencies, including the U.S. dollar and the euro, as the concerns about the outcome of the European sovereign-debt crisis and the struggling U.S. economic recovery.

The rumors about the bailout for Spain, despite being dismissed, seriously wounded the euro, causing it to fluctuate between gains and losses. The U.S. housing market brought concerns about the recovery of the nation’s economy. Building permits in May were at a seasonally adjusted annual rate of 574,000. This is 5.9 below the revised April rate of 610,000. Privately-owned housing starts in May were at a seasonally adjusted annual rate of 593,000. This is 10.0 percent below the revised April estimate of 659,000.

The sentiment on the markets reacts more readily on the negative news nowadays, while the effect of the positive news often remains muted. And today’s news were mostly negative, which is actually quite positive for the safety demand and the Japanese currency.

USD/JPY traded at 91.37 as of 16:13 GMT today after opening at 91.43. EUR/JPY traded at about 112.59 down from its opening level of 112.76.

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