The Japanese yen was rising through this week as concerns about the European debt crisis returned to markets with new strength, reassuring that safe assets would be in high demand.
The surging borrowing costs of the European nations refueled doubts and fears among traders, driving them to the safety of the yen. There aren’t many choices for traders seeking for “safe” currency as the franc basically lost its “safe haven” status after the Swiss central bank pegged it to the euro, while the dollar is under threat of more quantitative easing that would weaken the currency. The end of the week eased “risk aversion” sentiment, making the yen’s rally pause, but markets didn’t shifter to “
The performance of the yen against the euro, the pound and the “commodity” currencies was virtually the same. The Japanese currency rallied for the whole week, but the rally stalled on Friday. The performance of the Japanese currency against the dollar demonstrated a different picture. The greenback was also advancing during this week, but demand for the yen was higher, resulting of almost unstoppable drop of USD/JPY.
EUR/JPY opened at 106.68, fell to the weekly low of 103.39 and closed at 104.01. GBP/JPY was down from 124.24 to 121.49 and AUD/JPY fell from 79.88 to 76.95 this week. USD/JPY declined from 77.24 to 76.87.
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