Today the yen fell for the second day in a row on Forex as the stock markets rallied and the traders looked for the more high-yielding assets, selling the Japanese currency for dollar and other risky currencies.
Although, the U.S. dollar is also heading for the second weekly gain against the Japanese yen, JPY declined mostly against such carry trade favorite currencies as Great Britain pound (5% interest rate) and South African rand (11.5% interest rate!).
Of course, its too early to say that the carry trade is back and the financial crisis can be disregarded in the high-risk Forex trading. Most probably Its just a short-time shift in the investors behavior as the U.S. economy is seen to be recovering and the Bank of Japan stance on the interest rates remains far from hawkish.
Some financial strategists still believe that the USD/JPY bottom hasnt been reached yet and that a global return to carry trade would be really premature at this time.
USD/JPY rose from 104.38 to 104.68 today after reaching daily high at 105.3 its maximum value since February. Yesterday USD/JPY grew by 0.4%.
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