Investors are feeling somewhat more courageous right now as fears, sparked by the problems in Portugal’s banking sector, waned and speculations resumed about a prolonged period of accommodative monetary policy in the United States. As a result, Forex market participants were less interested in buying safe currencies, including the Japanese yen.
Federal Reserve Chairperson Janet Yellen will testify this week, and the market counts on another dovish message that will follow the previous cautionary comments. It would mean that interest rates remain low and supply of cheap money remains available for a longer period than was previously anticipated. This, together with the waning risk-negative sentiment, made investors prefer risky assets with higher yield and feel no need for safer ones.
USD/JPY rose from 101.38 to 101.57, and EUR/JPY advanced from 137.87 to 138.40 as of 15:14 GMT today.
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