JPY Daily News

Yen Continues to Ease

Despite yesterday's “risk-off” trading environment the yen failed to make significant gains on the back of safe haven inflows. As tensions escalated in the forex markets and equities declined with the flair up in the European debt crisis the Japanese yen typically sees strong buying pressure as a result of safe have bids. However, yesterday the yen failed to hold a majority of its gains. This highlights the shifting trend in the yen as market forces focus more on Japanese fundamentals.

The USD/JPY fell to a low of 81.32 after beginning the day near the 82 level before closing down slightly at 81.79.

The failure of the yen to keep its safe haven gains shows a shift in the trend of the strengthening yen following deteriorating economic fundamentals. Yesterday the BoJ issued a negative economic assessment. The report for the month of May shows production has fallen and domestic private demand continues to weaken following the earthquake and tsunami on March 11. The Japanese economy contracted by 3.7% on an annualized basis in Q1.

As traders continue to focus on Japanese economic fundamentals and not safe haven inflows the yen could continue to weaken from its early May high. Further USD/JPY targets may be retracement levels from the April to May move at 82.50 followed by 83.25.

Current Time: 05/27 00:30 GMT

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#	Time	$€£¥	Event	Per.	Prev.	Fore.	Act.	Imp.
05/24
	00:50	JPY	Monetary Policy Meeting Minutes		*	*	*
	00:50	JPY	Trade Balance		0.10T	-0.59T	-