Japanese Yen Leads the Majors in Thin Trading

Japanese yen is leading the majors today as trading thins out during the second-to-last trading day of the year. In an interesting turn of events, equities have decoupled from their normal association with high beta currencies as the euro and the pound lose ground against the yen. US dollar is also down against the yen.

Even though equities are mostly higher today in Europe and the United States (Asian equities ended mostly lower), European currencies are struggling. This is due mainly to the fact that the ECB‘s balance sheet indicates that it has been printing money — to no avail. Additionally, the latest Italian auction of 10-year notes wasn’t as successful as hoped.
With concerns about the eurozone haunting Forex traders, it is little surprise that the Japanese yen is gaining favor. Yen is considered a stable currency, and it is favored in times of uncertainty. Even though Japanese leaders hate to see the yen appreciate against its counterparts, there isn’t much that can be done right now, since there are just too many concerns about what’s next for the eurozone.
So, for now, Japanese yen is leading other major currencies, performing well. Some volume is likely to pick up tomorrow, with the end of the month, quarter and year, but it is by no means certain that Forex traders will feel more confident about the eurozone by then.
At 17:10 GMT USD/JPY is lower at 77.7300, down from the upen at 77.9430. EUR/JPY is down to 100.5815, from the open at 100.8615. GBP/JPY is lower at 119.6460, down from the open at 120.4750.

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