The Japanese currency started another week gaining versus most of the main currencies as several domestic and international events spurred demand for refuge currencies, affecting negatively mainly currencies in Europe this Monday.
Today’s Japanese quarterly GDP figures were posted reaching a 3.7 growth in the second quarter, which was below expectations, raising concerns that an economic recovery in Asia may take longer to appear, oddly enough favoring the yen in foreign-exchange markets. Colonial BancGroup Inc., a traditional U.S. lender, had its operations terminated due to its incapability of managing its growing debts, being followed by other lenders in Arizona and Pittsburgh, raising the number of total banking bankruptcies to 77 in U.S. this year, a fact which certainly adds to pessimism in trading markets. The pound was one of the biggest losers versus the yen today, as home prices continue an historic decline in their price in Great Britain.
Traders are once again purchasing the yen massively in order to guarantee their portfolio’s safety, according to analysts. Even if an economy recovery starts indeed to happen, there are still many global slump consequences that will become evident, raising the number of bankruptcies and unemployment figures worldwide, which will certainly raise attractiveness for the safety profile of the Japanese currency.
GBP/JPY traded at 154.37 as of 9:34 GMT from a previous rate of 156.35 when markets opened this morning in Asia. EUR/JPY continued its decline, being traded at 133.36 from 134.41.
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