The Japanese Yen was pushed broadly higher during Asian trading as investors book profits ahead of several major events which are scheduled to occur during the week. Currency strategists confirm that market players use the safe haven Yen to fund carry trade purchases off higher risk assets with the understanding that the Bank of Japan’s current ultra loose policy is likely to endure with possibly more easing on the horizon. Some analysts believe that the Yen’s rise was due to a decline in equities around the globe as investors sought out a reliable safe haven.
As reported at 10:15 a.m. (JST) in Tokyo, the USD/JPY pair slipped from a 6-month peak to trade at 102.35 Yen; over the past six weeks, the U.S. Dollar has gained about 6.6% on the Yen, and many believe that though support at 101.90 Yen is solid, it was long overdue for a slight correction. Meanwhile the EUR/JPY dropped from the recently struck 5-year high to the more recent 139.11 Yen. The EUR/USD remained relatively flat at $1.3589, nearly recovering all losses incurred on Monday.
Central Bank Decisions Loom
Markets this week will be focusing on several bits of key data including central banks policy meetings which are to be held in the Eurozone and the U.K.; at the upcoming Bank of Canada meeting many analysts believe might that the central bank might decide to take on a more dovish tone resulting in a sell off of the Canadian Dollar over the past several days.