The Japanese yen returned its strength as the unclear prospects of the Greek referendum make traders to seek safer currencies and Japan’s one remains an obvious option in such cases.
The expected referendum in Greece makes Forex traders anxious. What if the referendum would end in “no” vote? A default is most likely outcome, and a disorderly one. And a negative vote is a definite possibility, considering how bad most of Greece’s citizens are feeling about the austerity measures that are part of the rescue plan for the European country.
And there is question: will the referendum actually occur? The Greek officials claim that the Cabinet gave an unanimous backing to Prime Minister George Papandreou for his referendum plans. Yet there is a rumor that the plans are already scrapped and the referendum won’t happen.
Whatever the case, the uncertainty itself is enough to make traders seek refuge. And the yen yet again is the preferable choice, even after the intervention to weaken the currency. The yen even erased its yesterday’s losses after the dollar, even though the greenback is also considered a safe currency.
USD/JPY fell from 78.36 to 78.12 today as of 5:25 GMT, following yesterday’s rally from 78.17 to 78.35. GBP/JPY went down from 124.94 to 124.84, while EUR/JPY dropped from 107.34 to 107.21 today.
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