The Japanese yen was a powerhouse of the Forex market during the past week. While the currency paused its rally by the weekend, it still ended trading with huge gains against other most-traded currencies.
The week has started with risk aversion due to the drop of crude oil prices and global stocks. This helped the yen to log a big rally, and the currency reached multi-year highs after Prime Minister Shinzo Abe suggested that Japanese policy makers should be careful in intervening into currency markets. The yen’s rally lost some of its steam by the end of this week’s trading as crude rebounded and Finance Minister Taro Aso hinted that an intervention may happen after all.
Ahead of this week, analysts were unsure where the US dollar would go, refusing to give a definite forecast. Turned out they were right as the dollar ended the week mixed, rising against some currencies while falling against others. Nevertheless, many specialists remain bearish on the greenback in the near term.
USD/JPY sank 3.1% from 111.59 to 108.18 — the lowest weekly close since October 14. GBP/JPY plunged as much as 3.8% from 158.66 to 152.82 the lowest weekly settlement since August 2013. CAD/JPY dipped from 85.59 to 81.81 during the week but rebounded to settle at 83.21 on Friday.
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