The Japanese yen ended Friday with gains as uncertainty about the future of the United States and the European Union drove investors to the perceived safety of Japan’s currency.
US politicians canceled the budget discussion, adding to fears that the fiscal cliff will become unavoidable. Italian Prime Minister Mario Monti resigned, returning attention of market participants to the eurozone and its problems. The resulting atmosphere of uncertainty and worries benefited the yen.
Of course, the Japanese currency also feels pressure because of the threat of an intervention from Japan’s policy makers. Yet the currency has already weakened tremendously because of that threat and now it is putting more attention to bullish factors.
USD/JPY dropped from 84.36 to 84.21 yesterday and its daily low was at 83.84. EUR/JPY fell from 111.70 to 111.01 and GBP/JPY declined from 137.25 to 136.15.
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