The Japanese yen gained on all of its major rivals on Monday and continued to exhibit strength against such currencies as the euro and the Swiss franc on Tuesday. Against the US dollar the yen halted its rally, while it actually pulled back versus the Great Britain pound.
Political uncertainty is seen by market analysts as the main reason for the yen’s strength as investors were running to the safety of the Japanese currency. In Europe, quite a few elections are planned for this year. Traders are worried about the possible outcome of the voting, especially as anti-establishment forces are gaining popularity.
While the United States are past elections, they are not immune to uncertainty as decisions of President Donald Trump often cause controversy in the country and abroad. Additionally, market participants are concerned what impact his isolationist policies will have on US trade and economy. Economists already speculate that the policies will make the Federal Reserve be more cautious and slow with its monetary tightening.
USD/JPY traded at about 111.81 as of 2:55 GMT today after opening at 111.73. EUR/JPY slid from 120.01 to 119.92. GBP/JPY ticked up from 139.25 to 139.49.
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