Japanese yen is headed lower today, dropping as risk appetite is the focus of many Forex traders following the quantitative easing announcement out of the United States. Earlier, Japanese leaders downgraded the assessment for Japan’s economy, and that is weighing a bit as well.
As Forex traders turn to riskier assets, thanks to the latest announcement from Ben Bernanke and the Federal Reserve, the Japanese yen is heading lower. There is no need for a safe haven at this point.
Also not help the situation is the warning given by Japanese Finance Minister Jun Azumi. He said that Japan’s economic growth is waning, and this is the second consecutive downgrade for Japan’s outlook this year. Even though it doesn’t look as though yen strength is going to be very dramatic anytime soon, Azumi still made a point of saying that leaders stand ready to keep the yen weak as the country works to move out of the economic doldrums.
In order to help the economy, stimulus will be needed, ensuring that a race to the bottom in “currency wars” of devaluation will continue, especially amongst the low beta currencies.
At 14:37 GMT USD/JPY is up to 78.1840 from the open at 77.4980. EUR/JPY is up to 102.8065 from the open at 100.6550. GBP/JPY is up to 126.8705 from the open at 125.1850.
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