Yen Weakens, Even as Risk Appetite Fades
Even though the risk rally is showing signs of slowing, the Japanese yen still remains weaker against other majors. Yen just doesn’t have the same excitement going for it. Plus, Japanese leaders recently promised to help keep the yen weak in order to stimulate the economy.
It’s an interesting situation right now. The recent risk rally is fading as eurozone fears return, and as Morgan Stanley reports a huge quarterly loss of $1 billion. Additionally, there are some worries that the success of the most recent Spanish bond sale will prompt Mariano Rajoy to continue to put off asking for aid. With these factors cause risk aversion, it isn’t much of a surprise that the US dollar is headed higher.
Normally, the yen gets a boost from this type of situation. However, the yen is lower right now. Some of the yen’s poor performance is likely to the recent comments from Japanese officials about plans to boost the economy by keeping the yen weak. Those comments are designed to concern Forex traders and encourage them to favor other currencies.
At 13:35 GMT, USD/JPY is higher at 79.2865. Up from the open at 78.9345. EUR/JPY is higher at 103.8765, up from the open at 103.5595 — but still off the session high of 104.0950. GBP/JPY is up to 127.8765 from the open at 127.4795.
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Earlier News About the Japanese Yen:
- Japanese Yen Weakens on Officials' Comments (2012-10-17)
- Yen Drops for Fourth Day Amid Risk Appetite (2012-10-16)
- Yen Depressed as FX Market Casts Off Negative Sentiment (2012-10-11)
- Japanese Yen Gains on Concerns about Global Economy (2012-10-09)
- Japanese Yen Heads Higher on Risk Aversion (2012-10-08)