Risk averse FX traders helped to send the Japanese Yen higher during the Asian trading session as uncertainty once again left markets jittery, however currency strategists are attributing the Yen’s bounce to position unwinding. Regardless of cause, the Yen now has back-to-back gains against the U.S. Dollar as well as the common currency Euro. Despite a good effort from the Turkish central bank to restore investor confidence in emerging market currencies, uncertainty and stress as a result have resumed now that the Federal Reserve has indicated that its QE tapering would continue with an additional $10 billion a month pulled out of circulation.
As reported at 11:34 a.m. (JST) in Tokyo, the USD/JPY pair dropped to 102.13 Yen, a loss of 0.1% which followed Wednesday’s loss of 0.7% for the greenback. Currency analysts say that support can be found around the 101.62 Yen level, but that a further drop to 100.89 Yen is also possible. Though the Yen’s rise is often a knee-jerk response to investors’ collective jitters, there has been some erosion of the Yen’s specific appeal given the Ban of Japan’s conviction to keep the Yen’s value suppressed through massive QE.
RBNZ Disappoints Some FX Traders
In New Zealand, the Kiwi Dollar slipped after the New Zealand Reserve Bank maintained its monetary policy with no change to benchmark interest rates, despite some expectations that a hike was in order. The NZD/USD had traded at $0.8173, a 1-month trough and a loss of 0.3% from late Wednesday’s trade in New York. Analysts say that the RBNZ is still likely to move ahead with tightening before too long as the economic outlook for New Zealand remains solid.