Japanese Yen Gains as Sentiment Worsens

Japanese yen is gaining as sentiment reverses. Reports out of Europe are sending Forex traders looking for safe haven, and that is providing a boost to the yen against its counterparts.

Earlier, safe haven currencies were heading lower as risk appetite improved on the idea that eurozone leaders are ready for a tighter fiscal union. Those hopes, however, are fading as Germany turns back suggestions that current bailout funds be combined with permanent bailout funds meant for the eurozone.
The news has Forex traders, once again, worried about the stability of the eurozone and concerned about what comes next. Additionally, continued concerns about the economy in the United States, especially with the jobs situation, are weighing on many riskier assets.
With all this uncertainty, and with equities erasing earlier gains, it is little surprise that Forex traders are looking for the safe haven associated with more stable assets like the Japanese yen. Yen, as one might expect, is gaining against the euro, as well as the US dollar. However, yen remains down against the UK pound.
Expect more volatility on the Forex market in days to come. It appears that hope, alternating with disappointment, is likely to remain the pattern.
At 14:13 GMT USD/JPY is lower at 77.7150, down from the open at 77.7315. EUR/JPY is lower at 103.8034, off the open at 104.1715. GBP/JPY is higher at 121.4495, up from the open 121.2750.

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