The Japanese Yen remained close to a 6-month trough against the greenback and a 4-year low versus the common currency Euro as investors favored the low yielding albeit safe haven currency as the carry trade for higher risk asset purchases. Investors are likely to continue to use the Yen for this purpose given the Bank of Japan’s insistence at keeping monetary policy ultra loose as a key component of the Prime Minister’s plan to overcome more than a decade of stagnation and to sustain economic growth.
As reported at 11:13 a.m. (JST), the EUR/JPY pair was trading at 139.10 Yen, edging away from the session peak of 139.6828 Yen. The USD/JPY pair remained close to the overnight high of 102.605 Yen, but had dipped to 102.28 Yen; currency strategists expect to see a test of this year’s high.
Japan Economic Data Eyed
Investors had been awaiting Japan’s inflation data for October to help determine whether or not the Bank of Japan might push for additional stimulus, however the CPI data came in unchanged at 1.1%, which only served to add to investors’ uncertainty. The unemployment rate also remained unchanged at 4% against expectations it would tick lower, while October’s industrial production slipped to 4.7% on an annual basis. The only high point in the data was an improvement in Japanese housing starts. Following the late Thursday/earlier Friday morning release of that key economic data, the USD/JPY was trading down at 102.233 Yen, while the EUR/JPY was trading higher at 139.155 Yen.