The Japanese yen continued to lose against the US dollar on Thursday following its rapid decline yesterday, as the greenback recovered from the initial reaction to Donald Trumpâs victory in the US presidential election.
The yen has been falling rapidly since mere hours after the Republican candidate became the newest US president, even though the Japanese currency briefly touched its highest level against the dollar since October 3. The dollarâs powerful advance against its rival currencies is a surprise to most traders as the US currency was anticipated to sharply fall if Trump won, an anticipation that proved true for no longer than a couple of hours.
The starting point for the decline of safe haven assets, which include the yen, gold, and Swiss franc, appears to be Trumpâs victory speech. The new president, whose first day in office will be January 20, made no mention of his famous wall proposal or his plans of bringing the North American Free Trade Agreement to an end.
Following the speech, global investors reassessed their presumed worries, which seemed to be exaggerated. However, a lot of ambiguity still surrounds the actual future of Trumpâs bold promises during his election campaign.
The yenâs decline to its lowest level in more than a month is convenient for the Bank of Japan, which has done a lot of work to lower the value of its currency. However, the movement of the yen against the dollar is predicted to remain volatile for a while and will be highly sensitive to political events and economic data. The Japanese gross domestic product report is due next week, while the Federal Reserve meets on December 14 to update its monetary policy.
USD/JPY rose to 106.63 as of 18:00 GMT after touching 106.90 at 14:45 GMT. The pair started trading today at 105.75 after it rose from yesterdayâs lowest level at 101.19.
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