Risk aversion is rising right now, and the Japanese yen is gaining across the board because of it. Concerns about Europe continue to dominate the markets, and Forex traders are looking for stability and safe haven. The Japanese yen offers that, and is quite popular right now.
The biggest concern right now is Greece. Right now, the party Syriza is trying to form a government, but that party (known for its anti-bailout sentiment and opposition to austerity measures) is having difficulty forming a government. Others will be given three days to form a government, and if no one can, elections will be called again. In any case, there are concerns that the Greek government can’t pull it off, and that Greece will withdraw from the monetary union by the end of the year.
With risk aversion such a concern, it is little surprise that the yen is gaining in strength. The currency has long been considered a safe haven, and it offers a certain stability. With yen moving higher, it’s time for Bank of Japan leaders to once again consider intervening. However, if things continue to remain this uncertain on the global market, no amount of intervention is likely to keep the yen weaker.
At 13:07 GMT USD/JPY is down to 79.5740 from the open at 79.8730. EUR/JPY is down to 102.9060 from the open at 103.8810. GBP/JPY is down to 127.9510 from the open at 129.0650.
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