Japanese Yen Falls as Investors Prefer Higher Yielding Assets

The Japanese yen weakened today, falling to the lowest level in almost three week, as the economic growth in the US and across rest of the world makes higher-yielding assets more preferable for investors than safer ones.

The report of Automatic Data Processing, Inc. about the employment change today showed the increase by 201,000 in March. The positive report supported the optimistic outlook for the non-farm payrolls later this week. The Standard & Poor’s 500 Index advanced 0.7 percent and the MSCI World Equity Index went up as much as 1 percent.

The optimism about the US economy is growing and the talks about possible increase of the interest rates are intensifying. Thomas M. Hoenig, the President of the Federal Reserve Bank of Kansas City, said:

Policy should acknowledge the improving economic trends and begin to withdraw some degree of accommodation If this is not done, then the risk of introducing new imbalances and long-term inflationary pressures into an already fragile recovery increase significantly.

USD/JPY rose from 82.46 to 83.11 today as of 22:45 GMT, while earlier it reached 83.17, the highest level since March 11. EUR/JPY jumped from 116.38 to 117.41. GBP/JPY advanced from 132.02 to 133.60.

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