By: Barbara Zigah
A recovery in global share prices whetted the risk appetite for high-yielding currencies and pushed the Japanese Yen down in trading today. As reported at 5:14 p.m. (JST) in Tokyo, the Japanese Yen fell broadly; versus the U.S. Dollar, the Yen dipped slightly to 94.30 Yen, a decline of .2%, though against the New Zealand and Australian Dollars, the Yen lost .5% on each. Share prices on the Shanghai exchange rallied 4.5%, which spurred a smaller rally on the European exchange which was up 1.3% in early trading. With risk aversion somewhat calmed, investors sought out higher yielding currencies, to the Yen’s detriment. However, according to one currency strategist in London, the risk rally will likely be limited until investors are convinced that economic recovery is sustainable.
In support of investors’ cautious stance, the Bank of Japan made the pronouncement that global economic growth continues to be fragile, and Japan’s export recovery could be impacted as a result. In his statement, Atsushi Mizuna, a Bank of Japan board member, confirmed that the Japanese central bank could do little to prop up short term prices, though he did suggest that the bank may continue their somewhat unconventional measures to assist the Japanese economy through the year’s end and beyond.
Demand for risk spurs Yen’s Broad Slide
Barbara Zigah
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About Barbara Zigah
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.