Yen Gains on Woes of Europe, Flat vs. Dollar

  May 29th, 2012 at 21:16, Vladimir Vyun

Some yen notes and coinsThe Japanese yen gained against most major currencies today as endless woes of European countries spurred demand for safer currencies. The yen was flat versus the US dollar, though, as the greenback is also considered to be a safe haven.

Europe’s debt story has plagued markets for several years already and it has done a great damage to traders’ willingness to risk. Previously, gold was a favorable asset among investors, who distrusted paper currencies. Nowadays, it seems, the tables have turned and safe currencies are running higher, while gold is plummeting.

The not-so-impressive performance of the yen against the dollar may be explained by poor macroeconomic reports from Japan. The unemployment rate unexpectedly increased by 0.1 percentage point to 4.6 percent in April. Retail sales rose 5.8 percent in April, following the 10.3 percent advance in March. The median estimate was 6.2 percent.

Japan is not too happy about the strength of the yen as it hurts nation’s economy. The minutes of the Bank of Japan’s monetary policy meeting showed that the central bank is going to maintain its accommodative policy. But it does not look like the bank is ready for any aggressive actions and it is questionable if the central bank’s efforts would have any effect on the appreciating currency.

EUR/JPY dropped from 99.66 to 99.35 as of 21:16 GMT today, reaching intraday 98.93 — the lowest rate since January 19. GBP/JPY was down from 124.59 to 124.32. At the same time, USD/JPY traded at about 79.49, following the rise from 79.45 to 79.64.

If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

Leave a Comment

Name Required

Email Required

Website

Comment

Archives

SUBSCRIBE

Follow Top Forex News on Google+ G+