Yen Reaches New Decade Highs on Forex Risk Aversion

The expectations for the worsening of the global economic situation in the developed nations fueled the risk-averting mood in the foreign exchange market, pushing the Japanese yen to the new yearly maximums today.
The yen reached its new record high level against the US dollar since June 1995 and the strongest level against the euro since September 2001. A three-month high was reached against the Great Britain pound. As almost always with the yen, the reason for the gains lies not in the exceptional growth rates of the country but in the global risk aversion, which once again begins dominating the minds of the traders. The commentaries of the officials and the economic analysts that explicitly signal a second wave of the crisis don’t leave a chance for the high-yielding currencies against the safe haven currencies (such as yen).
USD/JPY fell from 85.10 to 84.38 as of 8:22 GMT today after reaching as low as 84.15 during the early trading session. EUR/JPY went down from 107.65 to 106.52, while GPB/JPY dropped from 131.93 to 129.91 (or more than 1.5 percent) today.

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