Japanese yen is weaker against high beta currencies today as risk appetite makes its appearance. Since it is not needed as a safe haven right now, the yen is slipping — and that is probably just what Japanese officials want to see.
Yen weakness comes as risk appetite gets a boost on the expectations that the ECB will be forced to do something to contain the sovereign debt crisis. Yen is higher, though, against the US dollar, since the greenback is down almost across the board today.
The drop for the Japanese yen proved positive for Japanese stocks today. Additionally, the weaker yen is helping the Japanese economic outlook. Hopes that a down yen will help boost economic growth as investors are drawn to country, and as the weakness gives Japanese exports an edge in trade, are rising.
Japanese officials are likely pleased with this turn of events; the Bank of Japan prefers a weak yen. Indeed, there have been instance in the past year in which officials have intervened in the currency market to keep the yen weak. But this more natural weakness is much preferred.
At 14:07 GMT USD/JPY is down to 79.3755 from the open at 79.4265. EUR/JPY is up to 98.9900 from the open at 99.0750. GBP/JPY is also higher, up to 125.2170 from the open at 124.7850.
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