Japanese Yen Slips While Investor Confidence Increases

As reported at 4:07 p.m. (AEST) in Sydney, the Japanese Yen dropped to a 2-week low versus the single currency Euro and the U.S. Dollar during trading today, on growing investor confidence that the global economy may finally be showing signs of recovery. The release on Thursday of U.S. manufacturing data and labor statistics added to the growing optimism, and as a result, appetite for higher-risk assets was boosted.

According to one foreign exchange strategist, confidence in the equity markets is spreading and appetite for risk is growing, resulting in the Japanese Yen being sold broadly. Economic data showing that there was a reduction in core consumer prices in Japan, and a 4-year high on the Japanese jobless rate, also put the Japanese Yen under selling pressure.

In light trading as a result of the May Day public holiday, the U.S. Dollar rose to 99.16 Yen, a slight gain over yesterday’s New York closing trade of 98.60 before it settled back to 98.87 Yen. The Euro touched on 131.52 Yen, the highest price since mid-April, before settling back at 131.25 Yen. The Australian Dollar rose to 71.88 Japanese yen, nearing Thursday’s 2-week peak of 72.56 Yen.