Japanese yen is pulling back in forex trading today, heading lower as risk appetite improves. Yen is lower against other majors today as optimism about the global economy, as well as improvement in Europe, boosts high beta currencies.
Right now, Forex traders seem to favor high beta currencies with higher yields right now, now that things appear to be looking up for many economies. German Ifo data surprised by indicating that confidence is growing. This bodes well for the eurozone, since Germany — as the largest economy — sets the tone for the rest of the 17-nation currency region. Additionally, the news that US yields are likely to remain low has spurred an appetite for higher yielding currencies.
The Japanese yen is lower as a result, dropping as news from around the world supports risk appetite. From a trade surplus in New Zealand, to comments from Mario Draghi that the worst is over in the eurozone to news that pending home sales in the United States are solidly higher than a year ago, all of the news supports high beta currencies. The yen is weaker as a result.
At 14:32 GMT USD/JPY is higher at 82.7970, up from the open at 82.4100. EUR/JPY is up to 110.3470 from the open at 109.3670. GBP/JPY is also higher at 131.9770, up from the open at 130.8350.
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