The U.S. dollar is heading for the fastest weekly gain in more than four years versus the Japanese yen as the financial markets get a feeling of relief from the crisis.
Yen was a favorite safe haven currency since the beginning of the financial crisis in U.S. and the global stock market slump. The low yields and the high security of the Japanese bonds attracted investors, making them to convert other currencies to yen. But when the fears are settling, the need in the low yielding securities declines and the yen turns to being the carry trade short base currency again.
Dollar is experiencing the downtrend against the yen since June 2007. From high of 124.13 per dollar yen rose to the bottom of 95.77. This week showed an extreme USD/JPY uprising as the yen was falling against the all major currencies.
USD/JPY rose from 98.81 to 102.37 (as of 9:14 GMT) this week. Thats a 3.6% weekly growth the biggest gain since February 2004, when USD/JPY rose almost 3.7% in one week. Most of the gain came on Monday and Tuesday, when the markets reacted on the banks losses reports.
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