The Japanese yen attempted to rally today on the back of the weaker Chinese yuan and falling oil prices, which hurt risk appetite. Yet Japan’s currency retreated after crude bounced, easing investors’ worries.
The People’s Bank of China set the reference rate for the yuan lower today, reigniting fears about hard landing of the world’s second biggest economy. Meanwhile, disappointment about the deal between Saudi Arabia and Russia hurt oil prices, adding to the risk negative sentiment among investors. All those factors contributed to the rally of the yen.
But the currency failed to keep gains as crude bounced, bringing relief to the market. Additionally, slower-than-expected growth of machinery orders and prospects for monetary easing made it even harder for the yen to preserve its earlier rally.
USD/JPY traded near its opening level of 114.05 as of 12:32 GMT today after falling to the daily low of 113.38. EUR/JPY bounced from the session minimum of 126.69 back to the opening of 127.09. GBP/JPY was near the opening (163.12) as well following the drop to 161.55.
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