Japanese yen is heading higher today as risk aversion becomes an issue. Concerns stemming from Janet Yellen’s remarks before Congress yesterday are sending high beta currencies lower, and boosting the Japanese yen.
Yesterday, Federal Reserve Chair Janet Yellen spoke to the Financial Services Committee in the House of Representatives about the economy, and the way forward for monetary policy. Even though the economic recovery isn’t complete, Yellen acknowledged that interest rates might go higher sooner than expected.
The news of possibly higher interest rates is weighing on equities, and sending stocks lower, which brings in a little risk aversion with high beta currencies. With risk appetite fading a bit, the Japanese yen is gaining ground against its major counterparts. As investors and Forex traders consider that the era of loose monetary policy in the United States could be coming to an end, high beta currencies are losing a bit of ground.
Yen has its own factors for weakness, including a continually expanding money supply, but some of that is being reined in as well recently.
At 13:37 GMT USD/JPY is heading lower, dropping to 101.4925 from the open at 101.6710. EUR/JPY is also lower, falling to 137.3030 from the open at 137.5125. GBP/JPY is down as well, falling to 173.5780 from the open 174.2480.
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