Japanese Yen Pauses Rally as Risk Aversion Eases Somewhat

The Japanese yen paused its rally against the US dollar and some other currencies as risk aversion caused by US politics eased a bit. Yet fears were not gone completely and may return in full force as clouds are gathering over US President Donald Trump and his future as a head of the United States.

According to Reuters report, some US officials claimed that people participating in Trump’s election campaign made at least 18 contacts with Russians during the election. While such communications are not unusual by themselves, the sheer number of them and the fact that they were not disclosed led to suspicions and fed the theory that Russia help Trump to win the presidency. The report followed other controversies surrounding Trump, leading to speculations that he may be forced to leave his office prematurely.

As for news from Japan itself, Japan’s gross domestic product rose 0.5% in the first quarter of this year according to the preliminary report. It was a faster growth than 0.4% predicted by analysts and 0.3% registered during the preceding three months.

USD/JPY traded near its opening level of 110.81 as of 16:07 GMT today following four daily losses in five sessions. GBP/JPY rose from 143.66 to 144.06, touching the high of 144.81 intraday, after also falling four times in five days. EUR/JPY, on the other hand, extended yesterday’s decline today, falling from 123.65 to 123.30, and its daily low of 122.55 was the lowest level since May 3.

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