Risk aversion is back as US data and Fed taper expectations weigh on global stocks. The yen is rebounding against its major counterparts, paring losses seen yesterday.
Recently, the yen hit a low not seen since 2008 against the US dollar. However, the yen is rebounding now, thanks in large part to the fact that risk aversion is making its appearance right now.
Data out of the United States was a bit disappointing, but there is still speculation that the Federal Reserve is preparing to taper its asset purchases anyway. With the latest struggles in the United States, and ongoing questions about the eurozone, risk aversion is setting in. Global stocks are losing ground, and safe haven currencies, like the yen, are on the rise.
Even with the recent gains, though, the yen is still likely to end down lower for the week. Yen has been losing ground rapidly with the thought of a taper boosting the dollar in the coming weeks. As a result, the gains now are not enough to overcome the losses from earlier in the week.
At 14:24 GMT USD/JPY is down to 103.1495 from the open at 103.3080. EUR/JPY is down to 141.7190 from the open at 142.0645. GBP/JPY is also lower, dropping to 167.9795 from the open at 168.8965.
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