The yen continued to grow today as equities markets in Asia had a faltering performance, since concerns about the economic recovery in the region remain very vivid, fueling demand for the safety profile of the Japanese currency.
Stock markets in Asia declined today, led by pessimism in Shanghai and Beijing concerning the economic health of the region and demand for Chinese products abroad, helping the yen to gain versus all 16 major traded currencies, since the Japanese currency is the most preferred investment in times of uncertainty. In Europe, pessimism spread out in markets after a German state secretary’s declaration mentioning that the country is preparing for a second round of credit crunches, raising concerns that the future of European Union is rather dark in terms of economy. The yen has been posting 10 days of virtually straight gains as the so waited economic recovery is failing to appear.
According the currency strategists, risk aversion is the main fuel supporting yen’s current rally, as it is often referred as the best investment for bearish market periods and certainly Japanese economic figures would not be behind the positive performance of the nation’s currency. The yen is likely to remain strong, as the delay in the economic rebound tends to push investors to safety even further.
EUR/JPY traded at 132.87 as of 10:29 GMT from yesterday’s rate of 134.01. CAD/JPY traded at 84.99 from 85.97.
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