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JPY Daily News
Equity Markets Drop the Yen
The JPY has significantly weakened against the USD since the start of the New Year. Yesterday's trading session was no exception with USD/JPY ending the day up at 93.05. The Obama economic stimulus plan and a rally in equity markets contributed to the appreciation of the pair.
Each of these factors had a hand in influencing one another along with the USD/JPY. The economic stimulus plan proposed by the Obama administration increased market sentiment for an economic recovery in the U.S. economy. The Nikkei 225 Average rose 2.1% yesterday on hopes of the economic recovery plan. Stronger equity markets may result in a lower Yen as investors seek higher profits in higher yielding assets. Japanese finance officials can now take a deep breath as the Yen has depreciated and solidified itself with a support line at the 93.00 level. The Bank of Japan had previously expressed concern that a strong Yen was not good for the country's exports and threatened to sell Yen in the open market to drop the value. Traders may be able to rule out this market intervention by the Japanese government.
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