The Japanese yen rose today, before returning to the opening level, on the speculation that the accelerating inflation in China would prompt the government to take steps to cool the economy.
The consumer prices in China grew 4 percent in October, the biggest advance since October 2008, following the 3.6 percent increase in September. The rapidly growing prices and the increasing trade surplus caused concerns among the Chinese policy makers about the possible asset bubble. The concerns caused the People’s Bank of China to increase the reserve requirements for the lenders by 50 basis points from November 16th.
The yen slumped yesterday heavily and unexpectedly. This may be partly because of yesterday’s rally of the dollar, which made more attractive than yen in the role of the safe haven.
USD/JPY traded at about 82.14 as of 2:07 GMT after rising yesterday from 81.68 to 82.26. EUR/JPY traded near its opening level of 113.39 after it jumped yesterday from 112.50 to 113.38. GBP/JPY traded at 132.75, following the advance of the previous session from 130.56 to 132.26.
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