The US Dollar edged higher versus the Japanese Yen after safe haven demand ebbed following a global stock market rally. The Yen was broadly lower, in fact, after comments made by Shinzo Abe, the Japanese Prime Minister, who hinted at the possibility that more fiscal stimulus might be forthcoming. Safe haven currencies were generally in retreat mode after the risk rally, with the Swiss Franc touching on an 8-month trough against the common currency Euro.
As reported at 11:04 am (BDT) in London, the USD/JPY pair was trading at 120.5585 Yen, a gain of 0.56%; the pair ranged from 119.8790 Yen to 120.7370 Yen. The EUR/JPY was also 0.32% higher at 134.7540 Yen. The EUR/CHF was lower at 1.0901 Swiss Francs, retreating from the session high of 1.0976 Swiss Francs.
Beijing Driving FX Demand
Analysts point out that the FX market is still largely being driven by the situation in China and the devaluation of the Yuan by the Chinese government. The concern is that Beijing could possibly move again to devalue the Chinese currency. The US Dollar has moved in tandem with risk appetite while safe haven demand continues to favor the Yen, despite monetary easing efforts by the Bank of Japan.