Risk aversion is intensifying on the Forex market, making the Japanese yen one of the best performing currencies. It was a real surprise, considering how weak was the currency last year.
The yen was falling in 2013 as policy makers preferred to keep the currency weak and it was expected that the weakness would persist after the Bank of Japan kept excessive stimulus in place this month. Yet the trading environment has completely changed. Now investors fear not only quantitative easing tapering from the Federal Reserve, but also impact on global growth of social unrest and political turmoil in such countries as Argentina, Thailand, Turkey, and Ukraine.
The yen, being a safe haven currency, thrives in an environment of uncertainty and fear. Therefore, the Japanese currency has jumped 2.9 percent this year, becoming the best performer among 16 most-traded currencies.
USD/JPY dropped from 103.25 to 102.24 and EUR/JPY slid from 141.41 to 139.28.
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