The Japanese yen is lower against most of its major counterparts today, dropping as forex traders consider increased liquidity in global markets and successful bond auctions in Europe.
With forex traders concentrating on what’s happening in Europe, and hopeful about what’s next, the yen remains mostly lower today, even as equities struggle. Yen is down against the euro as successful bond auction in France and Spain provide some help for the 17-nation currency.
Also helping high beta currencies, and putting downward pressure on the yen, is the recent decision by the Chinese to cut reserve requirements, effective December 5th. This news, plus the increase in liquidity thanks to an agreement by several central banks to keep the US dollar cheaper, is providing support for higher yielders like the euro.
Japanese officials aren’t likely to be bothered by this weakness; on the contrary, the yen is preferred weak. Manufacturers have been considering leaving Japan due to the recently strong yen. A strong yen reduces the trading advantage of Japan in the realm of global exports. With the yen weaker again, Japanese leaders hope to recoup some of their former advantages on the world stage.
At 16:19 GMT, EUR/JPY is higher, up to 104.6444 from the open at 104.366. USD/JPY is higher at 77.7189, up from the open at 77.6205. GBP/JPY is slightly lower at 121.8090, down from the open at 121.8950.
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