Yen Slides on Stock Market Rallies
Posted on 27. Jan, 2009 by admin in JPY Economic News, Japanese Yen, Japanese Yen Currency
The Yen slid yesterday against the EUR and Pound, as global stock markets recorded impressive gains. This was sparked by Britain’s Barclays Bank reporting that it didn’t need to raise additional capital, as it is expected to release better-than-expected quarterly profits. This led to a considerable rise in British, European, and Asian stock markets, whilst U.S. stocks also posted gains. This confidence, which led to traders dropping the Yen, means that confidence may be returning to investors. The question is how long can this last? The answer depends on how quickly the global economy recovers.
If data releases today from Europe and the U.S. are better than expected, then the Yen is likely to lose further ground against its major currency pairs. It’s important to take into account that a weaker Yen is better for Japan as this may help the country’s exports. There is a possibility that in the coming trading days the Yen is likely to drop the gains that it made against the Pound and the EUR last week. This could come about as these 2 currencies were over-sold. As Japan releases more data showing how deep their recession really is, investors may further unwind their trades from the JPY, to the USD, EUR, and GBP.
