Global Slump Ending Speculations Weaken Yen

The yen continued the bearish trend which started last week when positive economic news pushed the equities market up, decreasing demand for the low-yielding Japanese currency.
The yen will be soon entering the second week of losses against the euro and hit a six-month low against the Australian dollar, as growing optimism attracts investors to higher-yielding assets. The  U. S. dollar, considered a refuge investment during the crisis, entered a three-week losing trend against the euro, both the greenback and the yen have been punished as signs of economic recovery coming from China, which posted the first expansion in its manufacturing during 9 months, decrease risk aversion.
An interesting economic phenomenon is occurring in the Japanese currency market: as long as the renewed optimism increases the risk appetite among investors, the yen will continue to lose ground, and possibly reach record lows systematically. Multiple positive data is being released from different economic sectors in several continents, spurring a massive demand for equities and currencies which lost ground since last September, such as the Brazilian real and the Chilean peso, and as this assets will strengthen, the yen will proportionally fall.
The EUR/JPY traded at 131.90 from 131.85 in the intraday comparison. The USD/JPY remained virtually stable.

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