Yen Rebounds on Stocks Correction Movement

After gaining sharply for three days in a row, today stocks declined around the world, fueling demand and opening a profit opportunity with the currently weakened Japanese currency, which is witnessing its first significant climb in a week.
Today, Bayerische Motoren Werke AG, commonly known to the public as the BMW vehicle manufacturer, posted a 76 percent decline in its profits, causing European stock markets to open in the negative, consequently attracting stock traders to safer positions like those available in refuge currencies, benefiting the yen. In Europe, a report is likely to indicate that producer prices declined at a strong pace, damping demand for the European common currency. Emergent-market currencies like the South African rand, and Commodity-linked currencies like the Australian dollar, posted the sharpest losses versus the yen, as these currencies tend to have a higher volatility due to their riskier profile.
Analysts indicate today’s movement as a correction, and also a pause in the current rally that higher-yielding currencies are imposing versus the yen. A number of traders are selling their positions in emergent-markets to take profits from last week’s rally, but it does not mean that the yen is starting a recovering pattern, the outlook for the Japanese currency still remains very negative.
GBP/JPY traded at 160.29 as of 9:53 after topping at 162.17 hours earlier. EUR/JPY traded at 136.11 from 137.69.

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