Japanese Yen Falls as Risk Appetite Improves

Japanese yen is falling today, heading lower on a general feeling of risk appetite in the markets. Earlier this week, Japanese leaders used funds to buy other currencies in order to keep the yen lower, and today demand for riskier assets is encouraging yen weakness.

For now, there is plenty to support risk appetite. There are hopes that a Greek bailout will be accomplished on Monday, since there have been no new rumors to the contrary. Also helping is the fact that US economic data continues to be relatively good. It’s true that CPI numbers for January came in a little shy of expectations, but that hasn’t stopped the stock markets from rallying. Yesterday’s positive economic data, and the fact that lower than expected CPI means the Fed won’t be raising interest rates soon, are all contributing to risk appetite.
Additionally, demand for Japanese stocks was high today, along with demand for other Asian stocks. A rallying Asian session helped keep the yen weak. Yen weakness has meant that there is no need for Japanese leaders, especially Finance Minister Jun Azumi, to make more threats about intervention. For now, the weak yen will provide Japanese with an edge when it comes to exports.
At 14:46 GMT USD/JPY is higher at 79.2890, up from the open at 78.9345. EUR/JPY is up to 104.5680 from the open at 103.6425. GBP/JPY is up to 125.5150 from the open at 124.7130.

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