The Japanese currency, often associated with risk aversion by traders due to its relative safety, declined against all major currencies after the Federal Reserve confirmed signs of economic recovery in the American economy.
All currencies gained against the yen this Thursday as the Japanese government stated that national investors bought more assets than sold for the seventh week in a row, adding to the negative outlook for the Japanese currency today. A Federal Reserve statement signaled that the recession might be easing in the United States, creating a bullish pattern for virtually all high-yielding assets and equities markets as a whole, damping demand for the Japanese currency, often purchased when risk aversion is high among traders. Mixed signs regarding the depth of the global slump caused the yen to become extremely volatile having sequential days of losses and gains, creating ideal opportunities for day-traders to profit lately.
Analysts refer to the Feds statement as the main driver for the yens bearish scenario, being such declaration the reason traders needed to regain confidence and purchase high-yielding currencies fueled by a spree of risk appetite this Thursday in world financial markets. The yen is likely to swing considerably for the next weeks, as the actual global slump scenario remains undefined.
USD/JPY climbed to 96.53 as of 11:24 GMT from 95.45 yesterday. EUR/JPY also rose from 133.80 to 134.45.
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