Yen Gains on Greece & US Debt Problems

The Japanese currency attracted FX traders’ funds today, as Greece may face a selective default rating from S&P, while the United States are still likely to face a technical default next Tuesday.

The Japanese yen is still considered as a safe haven by the risk-averting market participants, compared to the dollar and the euro. During the time of instability — financial and economic, the safe haven currencies attract buyers. The yen rose for the third day against the US dollar and for the second day against the euro today.

The first factor for the yen growth is the looming technical default of the United States. The end date for the authorities to raise the debt ceiling is August 2, but there’s little hope that today’s vote in the Congress will be successful for the proposed debt relief plan. The second factor is Greece. S&P issued a report yesterday, stating that Greece will be assigned a selective default (SD) credit rating if EU debt restructuring measures are implemented there.

USD/JPY fell from 77.90 to 77.66 as of 9:26 GMT today. EUR/JPY declined from 111.93 to 111.61, while GBP/JPY went down from 127.22 to 127.04.

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