The Japanese Yen relinquished some of its previous gains during Tuesday’s Asian trading session as wary forex traders monitored the Japanese stock market for additional declines which were likely to impact the Yen. On Monday, Japan’s Nikkei index was hit with a 7.3% drop and the volatility continues to put Yen bears on the back foot. Growing signs that the global economy and China as its economic driver are slowing at an unexpectedly faster pace are also sending investors out in search of safe haven currencies with the Japanese Yen being the primary beneficiary of their concerns. The likelihood that the Federal Reserve could be reconsidering its ultra loose monetary policy is giving some Dollar bulls cause for celebration while Yen bears reflect on what analysts believe is likely to be an enduring era of stimulus for the Bank of Japan.
As reported at 1:42 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 101.15 Yen, a gain of 0.2% but holding close to Friday’s trough of 100.66 Yen. The EUR/JPY pair was holding at 1370.79 Yen, not too far from the low of 129.95 Yen struck last Thursday. Lackluster trading in the U.S. and the U.K. kept the majority of currencies range bound.