The Japanese yen rose today against most major currencies as the Forex market shifted from risk-on mode to risk aversion. The currency erased its earlier losses that were caused by positive market sentiment.
The news that Spain will get a €100 billion bailout spurred optimism among investors, but that positive mood was short-lived. Market participants are worried that the rescue would not solve the problems of the fourth-largest economy of the eurozone. On top of that, other nations that have received an aid may be frustrated as terms for Spain’s rescue look less demanding than those of Greek and Ireland’s bailouts.
Last week was bad for the yen as positive market sentiment diminished demand for safer assets. This week has started good for the Japanese currency and it is possible that appeal of safe currencies will return as Greek elections near and tensions regarding their outcome grow.
USD/JPY fell from 79.60 to 79.44 and EUR/JPY went down from 100.62 to 99.24 as of 19:38 GMT today. GBP/JPY was at about 123.09 after rising from 123.46 to 124.04.
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