The yen rebounded versus a number of important currencies as concerns regarding an eventual recovery of banking institutions worldwide rose, consequently attracting investors once again to invest in the safety of the Japanese currency.
The Japanese currency had a positive perform today after the CIT Group Inc. statement indicating that the existing liquidity available will not be sufficient to pay maturing notes, increasing speculations that one of the most important commercial lenders in the world may file for bankruptcy. Emergent-markets like the South African, and commodity-linked countries like Australia, witnessed the sharpest falls in their currencies as investors became more risk averse today regarding the world banking situation. Speculations regarding the CIT Group have been lasting for over a week, halting a risk appetite rally sparked by corporate earnings in the United States, as long as CIT Group remains on the news with negative forecasts, it is likely that the yen will remain strong.
Analysts confirm that hopes for a blasting economic rebound have already cooled down. Even if an eventual economic recovery is on its way, it is likely that aftershocks coming from corporations that were deeply affected by the consequences of the global slump will push markets down, influencing directly the foreign-exchange trade.
GBP/JPY fell to 152.93 as of 9:55 GMT from 154.97 yesterday. AUD/JPY traded at 76.06 after reaching 77.10 yesterday.
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