The yen and the greenback proceeded for a third day dropping as a report in the United States today is likely to indicate that the industrial production is shrinking at a slower pace, rising confidence that the global slump is easing, and consequently pushing traders to high-yield.
A very positive day in stock markets this Tuesday has attracted investors to purchase high-yielding assets, damping demand for the safety of the yen. In Asia, emergent-market currencies like the South Korean won and the Indonesian rupiah led the gains as their stock exchanges were the most bullish in the region. The yen lost against 15 of the 16 most traded currencies after Bank of Japan lowered forecasts for the Japanese currency, which lost appeal not only with a less attractive scenario for safer assets, but also with pessimism towards the future of the Japanese economy.
The explanation given by analysts for the current downtrend of the yen points directly to data released in the U.S. regarding earnings, which came out to be higher than expected, bringing risk appetite back to markets after a rather dark week. Todays industrial production data to be published in the U.S. will be determinant to decide what direction markets will take, if risk appetite continues, we will see most of the currencies rallying versus the yen.
EUR/JPY traded at 131.54 as of 10:53 GMT from a previous rate of 130.45. CHF/JPY traded at 86.61 from 85.95.
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