Japanese Yen Strengthens as Risk Appetite Fades
Japanese yen is strengthening as risk appetite fades. Lackluster economic data, continued eurozone concerns, and general risk aversion are all sending Forex traders to safe havens like the yen.
For a time, the Japanese yen was weaker on the expectation that the Bank of Japan would increase its easing efforts. Announcements that more quantitative easing would be used as economic stimulus in Japan followed the dramatic announcement of unlimited easing in the United States. The result was a weaker yen.
Now, though, things are changing. Poor manufacturing data has been reported in the eurozone and in China. Concerns about a slowing global economy are taking hold and Forex traders are looking for stability. With risk appetite fading, the yen is in demand. Eurozone problems continue; nothing has been resolved in that arena, and it looks like recession could be on the way.
On top of that, Forex traders are recognizing that Japan’s quantitative easing program just doesn’t pack the same punch as other easing programs. Compared to quantitative easing in other countries, the Bank of Japan’s effort seems inadequate.
At 13:45 GMT USD/JPY is lower at 78.1415, down from the open at 78.3820. EUR/JPY is also lower, heading down to 101.1300 from the open at 102.2750. GBP/JPY is down to 126.5205 from the open at 127.1350.
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Earlier News About the Japanese Yen:
- Japanese Yen Tanks on QE3, Growth Downgrade (2012-09-14)
- Japanese Turns Mostly Lower on Risk Appetite (2012-09-05)
- Japanese Yen Advances as Concerns about Global Growth Return (2012-08-30)
- Signs of Slowdown Spur Safety Demand, Yen Profits (2012-08-28)
- Japanese Yen Back in Demand as a Safe Haven (2012-08-24)