Japanese Yen Higher on Risk Aversion and Higher Yield

  July 12th, 2012 at 13:39, Miranda Marquit

Japanese yen symbolJapanese yen is higher today, gaining against other majors as risk aversion sets in, and as the yield offered by the currency suddenly becomes competitive. The latest developments have Forex traders looking for safe haven, and the bonus is that the Japanese yield is relatively high when compared with some of its major counterparts.

Right now, concerns about the global economy, and uncertainty about the situation in the eurozone, are weighing on markets. Risk aversion is high right now. Concerns that the United States isn’t ready to ease further are an issue, as is softer Chinese data. And, of course, no one is sure what will happen next in the eurozone saga. With all this uncertainty, it isn’t a surprise that safe haven currencies like the Japanese yen are preferred right now.

The yen is also getting a boost from its relatively high yield. We don’t normally think of the yen as a high yielder, but in the current environment, the 0.1% rate set by the Bank of Japan seems downright competitive — especially when compared to the 0% rate the ECB brought into effect this week.

At 13:37 GMT EUR/JPY is down to 96.5420 from the open at 97.6350. USD/JPY is down to 79.2700 from the open at 79.7660. GBP/JPY is down to 122.3835 from the open at 123.6550.

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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