JPY Daily News

JPY Positive from Low Risk Appetite and Carry Trade Reduction

The JPY continues its month long run against the Dollar and EUR. Yesterday was no exception as the USD/JPY ended the day at 95.57.

The boost to the JPY may be due to a cyclical rebound that has more to do with other countries, a reduction in carry trades, and a lack of risk appetite. The JPY has seen considerable strengthening the past months.

The massive deleveraging that is occurring has steadily increased the JPY as investors close their carry trades, paying back loans that were taken out in Japanese Yen. As the currency is converted back to Yen, this appreciates the JPY against the Dollar and EUR.

The sudden shift in policy by the U.S. Treasury Department did little to reduce risk in the market. The market is looking for stability. When the Treasury announced its intention to change their strategy with regards to the U.S. financial bailout package, markets accepted this announcement as added risk. This risk factor needs to be countered, otherwise the recovery may be more difficult and the JPY may continue to appreciate.

Current Time: 05/26 21:54 GMT

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#	Time	$€£¥	Event	Per.	Prev.	Fore.	Act.	Imp.
11/13
	04:30	JPY	Revised Industrial Production	m/m	1.2%	1.2%	1.1%