The Japanese yen rallied against most other major currencies today. Analysts explained the rally by risk aversion that followed the drop of crude oil prices.
Prices for crude oil fell today, sending commodity currencies (especially those directly tied to crude) down. Consequently, traders were seeking safer currencies as a mean of protection. The US dollar has lost some of its appeal due to the dovish monetary policy outlook, therefore the yen was a logical choice for many investors.
Yet some analysts warn not to be overly bullish on the Japanese currency. Prospects for monetary easing from the Bank of Japan mean that the rally of the yen may be rather short-lived.
USD/JPY declined from 111.59 to 111.19 as of 17:08 GMT today. EUR/JPY dropped from 127.22 to 126.68. The Great Britain pound was quite firm today, therefore GBP/JPY traded at the opening rate of 158.66 after rising as high as 159.56 and falling to 158.15 during the trading session.
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