The yen declined to a two-week low against the euro and lost versus several other currencies as a report in China indicated an increase in manufacturing, helping investors to be confident to purchase high-yielding assets throughout the world.
The Japanese yen had a very negative performance this Wednesday losing ground against all main 6 currencies traded globally, after China post the fourth manufacturing expansion in a row, suggesting that the Asian nation is recovering quickly from the global slump and may lead other countries on their way out of recession, raising confidence among traders to sell their assets in Japan in order to purchase riskier assets, since the yen is the lowest yielding currency option and often referred as a refuge in stormy economic times. The euro posted the sharpest gains versus the yen as European stocks had a positive day generally, adding to the already favorable scenario for the euro to rally against the Japanese currency.
Chinas positive figures have pushed Japanese investors to go abroad and purchase riskier options, according to analysts. As long as the Chinese reports continue to signal an economic recovery, they will immediately reflect in the Japanese currency, since a significant number of traders opted for the yen as a refuge during the global slump, and now, as confidence improves, they are returning to assets which were attractive before the recession.
USD/JPY rose to 96.88 as of 10:54 GMT from 95.95 in the intraday chart. EUR/JPY climbed to 136.18 from 135.55.
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