Japanese Yen Lower as Cautious Optimism Makes Appearance

Japanese yen is lower today, heading lower as cautious optimism makes an appearance on the Forex market. Economic data in the United States came in better than expected, and that means the yen is not being used as a safe haven.

Earlier, Japan reported that the forecasts for fiscal 2011 and 2012 had dropped. Japan expects weak economic forecasts, and a lower GDP. This isn’t very surprising, since the tsunami in March did a great deal to upset Japan’s economy.
Recovery from the tsunami has been slow, since Japan has been suffering from a stronger yen overall recently. The debt crisis in Europe has also contributed to difficulties in economic recovery for Japan. Unless the yen weakens further, and consumers pick up their purchases of goods from Japan, the country has a long way to go before its economic forecasts improve.
For now, though, the yen is weakening. Risk appetite is making an appearance as Forex traders look for higher yields. With better news coming out of the United States, and with hope once again springing up for the eurozone, some expect that higher beta currencies will do well, and that means a weaker yen to help exports and possibly improve the Japanese economy.
At 15:27 GMT USD/JPY is higher at 78.1310, above the open at 78.0615. EUR/JPY is also higher, at 101.9040, up from the open at 101.8590. GBP/JPY is up to 122.4815, gaining from the open at 122.3650.

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