Risk appetite is coming to the Forex market, sending high beta currencies higher. And, normally, this would mean that the US dollar would also be higher against the Japanese yen. Today, though, the yen is higher against the greenback. Weaker than expected US data is sending the dollar lower, and the yen is near three-month highs against the greenback.
Japanese yen is gaining as exports lead the recovery of the damage done to Japan’s economy following last year’s devastating earthquake and tsunami. Because of the importance of exports to prominent Japanese companies, leaders desire a weak yen.
With the yen gaining against the US dollar, Japanese leaders have once again put Forex traders on notice. Finance Minister Jun Azumi affirmed that Japan stands ready to intervene in the markets to keep the yen low if that is what it takes. Forex traders have no reason to doubt Japan’s resolve; the country has already intervened more than once in the past in an effort to keep the yen weak against the US dollar.
For now, risk appetite has other currencies gaining against the Japanese yen; only the US dollar is weakening against the currency. With excitement over better than expected data in the eurozone and Britain, it is little surprise that high beta currencies are in favor.
At 15:35 GMT USD/JPY is down to 76.1090 from the open at 76.2650. EUR/JPY is higher at 100.2700, up from the open at 99.7850. GBP/JPY is up to 120.6580 from the open at 120.1950.
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