JPY Daily News

JPY Jumps as Panic Grips Investors

As Japanese investors begin liquidating in excess of $1.3 trillion in overseas assets in order to bring money into the country, the Yen continue to extend its gains against its major currencies. The reason for the reshuffling of assets is due to the global slump in equities.


The Yen, which is a preferable currency in times of financial uncertainty, looks set for further appreciation. The Japanese currency may advance to 95 per Dollar should Japanese investment trusts, insurance companies and pension funds start selling foreign holdings. Yesterday the JPY rose for the third straight day to 99.87 from 100.67 per dollar at 12:04 p.m. in Tokyo on Friday. It has gained 8% over the past month. There has been almost no change in JPY versus the EUR, after European leaders agreed to guarantee bank borrowing and bolster big lenders. It declined to 134.76 Yen, from 134.96 at the end of last week.


As European countries have further room to cut Interest Rates in response to slowing global growth, evolving yield differentials should be further supportive of the Yen. The European Central Bank's benchmark rate of 3.75% compares with 1.5% in the U.S. and 0.5% in Japan. Traders raised bets on an ECB rate cut later this year.

Current Time: 05/27 03:06 GMT

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#	Time	$€£¥	Event	Per.	Prev.	Fore.	Act.	Imp.
10/14
	06:00	JPY	Household Confidence		30.1	30.2	31.4
	13:38	JPY	Overnight Call Rate		0.50%	0.50%	0.50%
	14:00	JPY	BoJ Governor Shirakawa Speaks		*	*	*
	00:50	JPY	Current Account		1.56T	1.15T	0.90T