Finance Minister Resignation Forces Yen Down
The yen declined today versus virtually all of the 16 main traded currencies as investors opted for
The yen posted the sharpest losses today versus commodities linked currencies like the Australian dollar, as demand for metallic commodities has been rising since the beginning of the week. The Japanese currency, known for its safer profile, has been less attractive in the beginning of 2010 as most traders expect an economic recovery in a worldwide scale, which is fueling rallies in both equities and commodities markets, consequently bringing investors to currencies linked to these fluctuations, as the Canadian dollar, which also gained significantly versus the yen and continues to advance versus its U.S. counterpart.
Even if the Japan’s finance minister resignation occurred due to health reasons, a shift on this position combined with a strong risk appetite sentiment made the yen to rank as the less attractive investment in currency markets today, and it may extend its losses further as long as optimism remains strong.
AUD/JPY traded at 84.66 as of 14:54 GMT from a previous rate of 83.59 yesterday. CAD/JPY traded at 89.25 from 88.18.
If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.
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Earlier News About the Japanese Yen:
- Yen Gains on U.S. Weak Housing Report (2010-01-05)
- Yen Tumbles on U.S. Consumer Confidence (2009-12-29)
- Yen Falls on Japanese Risk Appetite (2009-12-28)
- Yen Posts Weekly Drop on Poor Interest Rate Outlook (2009-12-26)
- Yen Down on U.S. Optimism (2009-12-21)
3 Comments
So the yen is considered a safe currency. Is the dollar also a safe currency? What is the dollar’s relation to equity markets? If the DJIA goes up does that help or hurt the dollar?
Yes, the U.S. dollar is also considered a safe currency. The U.S. treasury notes are considered to be one of the safest investments and thus traders move into dollars during financial crisis. As for the relation to the equity markets – it’s not always the same, but during last few years, U.S. dollar is inversely correlated with the U.S. stock market. But that won’t necessarily last for long.
Andrei,
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Daniel