Wednesday, 30 Mar 2011

Yen Falls To a 3-Week Low against the Dollar As Risk-Appetite Rises

The Japanese yen continued to weaken against most of its major currency rivals on Wednesday's trading session as demand for higher-yielding assets increases in light of reduced risk-aversion.

The yen fell to a three-week low versus the U.S. dollar after a private report showed that companies in the U.S. added more workers in March, signing that the U.S. labor market continues to recover. Employment increased by 201,000 in March from a revised 208,000 gain in February, said the ADP Employer Services.

The USD/JPY pair peaked at the 83.15 level today, marking a three-week high. The yen fell about 100 pips against the euro, and about 150 pips against the British pound. The EUR/JPY cross is currently trading near the 117.00 level and the GBP/JPY cross is trading near the 133.20 level.

Looking ahead to tomorrow, the most significant news event on the economic calendar looks to be the U.S. weekly Unemployment Claims. If the report will provide further evidence that the U.S. labor market is recovering, the Japanese yen may continue to weaken vs. its major counterparts.