Wednesday, 2 Jun 2010

Yen Continues to Fall as Safe-Haven Status Questioned

Following last night's news that the Japanese Prime Minister will be resigning, the Yen has continued to fall against its major counterparts in morning and afternoon trading. The U.S. Dollar has made considerable gains on the Yen, and is currently up over 100 pips from this morning alone. Currently, USD/JPY is trading around the 112.65 level. Despite the sovereign debt issues that have been plaguing the Euro-zone as of late, even the Euro has been able to move up against the Yen. Since this morning, EUR/JPY has increased from 111.49 to its current level of 112.55.

With regards to the rest of the day, traders will want to pay attention to the U.S. Pending Home Sales report set to be released at 14:00 GMT. Analysts are forecasting a slight drop in home sales from last month. At the same time, overall growth in the U.S. housing sector means that if the indicator comes in at the forecasted 4.9%, the greenback should make gains on its major counterparts.