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Yen Rises for Second Day on Credit Losses

September 16, 2008 at 10:37 by Andriy Moraru

Japanese YenThe Japanese yen rose to the new monthly and yearly maximum against the other major currencies traded on Forex today as the situation with the financial crisis worsened significantly through the weekend and Monday and the traders expect no improvement in the near future.

The carry trade counterparts of the yen suffered the most during the last two trading days — both Australian and New Zealand dollars reached their new three-year minimum levels against the Japanese currency as the carry trade, which have already been in despair, received a strong kick after the Lehman Brothers collapse.

The situation with the global stock markets is already called the worst since the Great Depression. Yen looks like the only investment capable of holding the value during such harsh times. Will the banks fail further, the yen will continue to show the positive dynamics.

Although, Japanese interest rate of 0.5 percent is the lowest of the developed economies and doesn’t look very attractive both for the Forex traders and the long-term investors, the safety of the funds with the global trend for the risk-aversion may trigger some new types of trade positions based on the long yen stance.

USD/JPY fell from 104.37 to 103.76 as of 8:26 GMT today. EUR/JPY declined from 149.01 to 147.94. GBP/JPY dropped from 187.73 to 186.22 today. AUD/JPY reached the new minimum since May 2005 today, falling down from 84.09 to 81.52.

If you have any questions, comments, or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

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