The Japanese yen gained today, extending yesterday’s rally, amid concerns about the situation in Europe and after Barack Obama won the US presidential election, spurring talks about the danger of the fiscal cliff.
The victory of Obama was positive for the risk sentiment in the long term as it means that Ben Bernanke will stay as a chairman of the Federal Reserve and will maintain his extremely accommodative monetary policy. In the short term though, market participants are worried that the President will argue with the Congress about measures necessary to support economic growth. Without actions from the lawmakers, the current tax breaks will end and that can spell doom for the US economy.
Europe does not help the traders’ mood either. The Greek parliament votes for the austerity measures required to get help from the European Union. Speculators fear that Greece will leave the eurozone if the vote is against the austerity.
USD/JPY fell from 79.98 to 79.91 as of 00:41 GMT today. EUR/JPY was down from 102.13 to 101.90 (the lowest since October 16) and GBP/JPY declined from 127.84 to 127.65.
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