The Japanese yen rose today, extending its gains for the third consecutive trading session. The main reason for the rally was the negative market sentiment, which made investors seek safer options to park their funds.
Concerns about global growth intensified after the crash of stock markets around the world. Yesterday, all of US stock indices dropped, most of them falling about 2% or more. Asian and European equities slumped as well, extending their losses today. US stocks are likely to move lower as well after markets in North America open today.
Meanwhile, Japan’s Cabinet Office lowered its economic forecasts. The Japanese economy is expected to grow by 0.9% this year, down sharply from 1.5% in the previous projections, and by 1.3% in the next year, also down from 1.5%. Inflation forecasts were revised lower to 1.0% from 1.1% for 2018 and to 1.1% from 1.5% for 2019.
USD/JPY dropped from 112.83 to 112.37 as of 9:58 GMT today. EUR/JPY edged down from 128.02 to 127.86, though bounced from the daily low of 127.64. GBP/JPY went down from 142.36 to 142.19, but also rebounded from the session minimum of 141.93.
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Risk-Averse Environment Helps Yen Gain for Third Day
