The Japanese yen declined today from its recent high values against the U.S. dollar, pound and euro as the global stock markets gained and the high-yielding assets looked more attractive than on the last week.
The Japanese yen rallied today during and after the Asian trading session, as the stock market in Japan plunged rapidly today. The risk-averting investors’ massive sell-off cut the NIKKEI 225 index by almost 4.5%.
Yesterday’s triumph of the currencies against the Japanese yen didn’t last too long. Today yen soared up to the two-week high against the euro and the Great Britain pound on the bearish stock market trading session.
Japanese yen continued to fall against other currencies today during the Asian session after the Reserve Bank of Australia lifted its interest rate to the historically high value — 7.00%.
Japanese yen is gaining against all its rivals today, as the stocks fall down and the high-risk currencies start to meet their demise. While traditional carry trade counterparts of yen - Australian and New Zealand dollars, are often unstable during such times, the less risky euro and Great Britain pound are also losing now.
The U.S. dollar, even after a recovery from the two and a half year bottom against the Japanese yen, is remaining weak against this Asian currency as the investors worry about the current state of the U.S. economy.
Japanese Ministry of Finance released a report today regarding the country’s international exchange reserves and the foreign currency liquidity along with the structure of the overall assets as on the end of December 2007.
Tokyo based massive sale of the Japanese yen spurred the daily drawdown of this Asian currency. Residents preferred to sell the yen opting for the riskier but higher yielding currencies, such as euro, Australian and New Zealand dollar and South african rand (so called carry trade investing).
Hidetoshi Kamezaki member of the Policy Board of the Bank of Japan said today during briefing with the reporters, that BoJ has no plans to lower main interest rate yet, and it will have to look at whole picture of the coming economic statistics before carrying out a decision on a rate’s change.
The Japanese yen fell against majority of the world currencies on the rising risk appetites of the global and Japanese investors along with the extremely low probability for the rate hike by the central bank of Japan.