JPY Corrects as the Currency Falls out of Favor with Traders
Posted on 19. Feb, 2009 by admin in JPY Economic News, Japanese Yen, Japanese Yen Currency
The Yen continued to depreciate as investors are choosing the Dollar over the Yen for a safe haven trade. The JPY fell against the USD and closed around 93.65. Moreover; the Japanese Yen lost almost 150 pips versus the EUR, closing at 117.70 and just around 200 pips versus the GBP.
The world’s second-largest economy shrank at the steepest pace since the 1974 oil shock last quarter as a global slowdown triggered record declines in exports and output. Gross domestics’ product dropped an annualized 12.7% last quarter, more than twice as fast as declines in the U.S. and Europe. The economy may suffer a bigger contraction in the current quarter, which could weigh on the JPY.
Looking ahead today, the Japanese market should have a heavy effect on the JPY versus its major currency counterparts, as the Overnight Call Rate will be announced today The rate is expect to remain unchanged but traders should pay close attention to the BoJ Press Conference that will follow to look for expectations of Japan’s economic future. Later tonight, the monthly All Industries Activity Index is expected to be released with a negative figure. This should add bearish momentum to the Yen against its counterparts. If Crude Oil prices change drastically following the Crude Oil Inventories release, expect some more volatility on the JPY.
