Japanese Yen Drops on Excitement over Greek Debt Deal

Japanese yen is dropping today as Forex traders become excited over the Greek debt deal. Yen is falling as risk appetite rises and low beta currencies find themselves out of favor. This is good news for Japanese leaders, who prefer to see a weak yen.

Greek leaders have agreed to austerity measures that allow a bailout from the ECB and IMF. The news has risk appetite soaring — especially for the euro. Forex traders are interested in yields right now, and the yen is a low-yielding currency. Additionally, yen is being impacted by economic news from around the world: More quantitative easing out of Great Britain, and fewer unemployment claims out of the United States.
Japan is also in the midst of working to reduce its need for dysprosium, a heavy rare earth metal often used in strong magnets and hybrid vehicles. With China squeezing supply, the cost of dysprosium has become almost prohibitive. The Japanese government has decided to spend 5 billion yen in an effort to reduce the need for importing the metal.
For now, the Japanese yen is likely to remain under pressure. However, bad news about the global economy or a new threat coming out of the eurozone could prompt a flight to safety and send the yen higher.
At 16:19 GMT USD/JPY is higher at 77.3319, up from the open at 77.0440. EUR/JPY is higher at 102.8785, up from the open at 102.1550. GBP/JPY is up to 122.6120 from the open at 121.8650.

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