Japanese Yen Advances as Concerns about Global Growth Return
Japanese yen is gaining against other majors as concerns about global economic growth return to the markets. Worries about what’s next for the world economy have added to risk aversion, weighing on high beta currencies and making currencies like the yen preferred.
Rumors abound that the Federal Reserve won’t make a move in September, and concerns about what Ben Bernanke will say tomorrow in Jackson Hole are starting to provide a bit of uncertainty in the markets. As a result, Forex traders are looking for currencies with stability. Yen is often thought of as a safe haven currency, with its stable base.
Right now, yen is in high demand, gaining strength from the uncertainty as high beta currencies dip. The news isn’t very encouraging to Japanese officials, and the Bank of Japan may intervene if things get too out of hand, but for now it appears that Japanese officials aren’t too concerned. That could change in the near future, but for today it appears that officials are ready to let yen strength build — so long as it does so at a fairly slow pace.
At 12:53 GMT USD/JPY is down to 78.5325 from the open at 78.6990. EUR/JPY is down to 98.5555 from the open at 98.6200. GBP/JPY is down to 124.5770 from the open 124.5950.
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