Yen Seesaws in Choppy Asian Trade

The Japanese Yen edged off session highs during choppy trade in the Asian trading session as risk on sentiment improved. The Japanese currency had initially been given a broad boost when gold prices took another dive but later gave back some of its gain after commodity prices steadied. Currency analysts believe that, in the short term, the Yen will rise so long as investors’ uncertainty in commodities keeps prices in check. However, the long term outlook continues to be for a much softer Yen given the Bank of Japan’s steadfast commitment to fighting the country’s long held deflationary trend through a massive bond purchase scheme worth some $1.4 trillion. When the central bank begins their program in earnest, analysts expect the sell off of the Japanese currency to be pronounced.

As reported at 12:33 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 98.21 Yen, a gain of 0.1% for the greenback after hitting an earlier trough of 97.62 Yen. Only last week the pair had touched on 99.95 Yen, a 4-year peak, only a handful of pips from the 100.00 Yen level. The AUD/JPY pair steadied at 101.19 Yen, with the Aussie moving off a session low of 100.24 Yen which had been struck earlier.