The Japanese yen extended its decline against its traditional carry trade counterparts today as the Asian stock markets soared after the U. S. Memorial Day holiday ended.
Yen dropped significantly against the Australian and New Zealand dollars (the favorite high-yielders that usually gain the most form the carry trade popularity) today after the financial market rally in Asia showed an improved confidence in the global economy. Low-cost yen-based borrowings spurred growth of demand for the Australian 7.25 percent and New Zealand 8.25 percent yields.
Currency analysts believe that the Japanese yen is currently at risk, because more traders turn back to carry trade as the fears of recession in U.S. fade and the global growth may sustain the high rates in such countries as Australia, New Zealand and United Kingdom.
Yen traded near one month low against the euro, while being almost unchanged against the Great Britain pound. Despite worsening state of the domestic housing market U.S. dollar also managed to gain against the yen today.
EUR/JPY rose today from 163.06 to 163.38 as of 8:30 GMT with a daily high at 163.88. AUD/JPY grew up from 99.27 to 99.69 and NZD/JPY rose to 81.76 after opening at 81.27 and reaching a daily maximum at 82.15.
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