JPY Safe-Haven Status Comes under Threat
Posted on 20. Feb, 2009 by admin in JPY Economic News, Japanese Yen, Japanese Yen Currency
The JPY’s safe-haven status came under threat again yesterday, as Japan’s economy has become increasingly volatile to the global recession. Japanese equities slid yesterday as exporters reported more bad news owing to the strong Yen. Japanese carmaker Nissan said that it may export 130,000 jobs to Mexico. Additionally, the Yen also reacted negatively to the U.S. Stock Market dive, leading the Nikkei to dive 1.2% too. In the last few days of trading the Dollar has made some big gains against the JPY. This is mainly due to the fact that investors and forex traders are of the view that the Dollar will be the number 1 safe-haven currency during the current global recession.
The JPY dived against the Dollar by 60 pips to close at 94.10. The Yen lost over 100 pips vs. the EUR, marking its second straight loss against the European currency. Against the GBP, the JPY lost over 60 pips to close at 133.97. There is a possibility that the Yen’s behavior against its major currency counterparts in recent days may be partly owed to a correction in the value of the Yen. Therefore, this may not be as bad as it first seems. If things continue like this, however, then the Yen may help Japan’s economy recover quicker out of recession. Today, forex traders are advised to follow events coming out of Japan, the Euro-Zone, and the U.S., as these may help set a price level for the Yen against its major currency crosses going into the middle of next week.
