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JPY Daily News
Fears of Further Intervention by the BoJ Manage To Halt Yen's Bullishness
The Japanese yen began last week's trading with rising trends on all fronts. However, by midweek, the currency started to correct its gains, especially against the euro and British pound. The EUR/JPY pair is still trading above the 113.00 level, and the GBP/JPY is trading near the 130.00 level.
The positive data from the Japanese economy has added to the bullish pressure on the yen. Japanese machinery orders unexpectedly rose, in a sign that a recovery in earnings may encourage companies to spend on equipment. In addition, the uncertainty in global markets continues to support the demand for the yen. The JPY is considered to be a safe asset, and thus when risk-aversion increases, the currency tends to strengthen.
However, investors should always keep in mind that the Bank of Japan (BoJ) may move to devalue the yen, should the currency continue to strengthen. Despite international criticism, Japan has not announced that it will not intervene again. For the moment, the yen appears to have stabilized, although further upward movement may occur.
As for this week, traders are advised to continue following the announcements from Japanese officials. These announcements have had a massive impact on the yen's value over the past few weeks, as investors look to see whether the BoJ will indeed intervene in the currency's trading again.
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