Japanese yen is back in demand as a safe haven as concerns about what’s happening in Europe weigh on high beta currencies. Once again, equities around the world are dropping as investors worry about what’s next for the eurozone. Yen is in demand as Forex traders look for a safer currency.
While eurozone concerns are once again driving the currency market, they aren’t the only things weighing on sentiment. Risk aversion is getting a big boost from the latest news out of the United States. Yesterday’s release of initial unemployment claims has had an effect, spooking investors who wish that the US economic recovery was moving a little faster.
Between the continued sluggishness in the United States, the fact that the eurozone is flirting with recession, and the fact that the latest Chinese data shows that growth is coming at a slower pace, it isn’t much of a surprise that these concerns for the global economy are translating into gains for the Japanese yen and other safe haven currencies.
At 13:03 GMT USD/JPY is a little higher at 78.5140, up from the open at 78.4915. Yen is gaining against high beta currencies, though, as a safe haven play. EUR/JPY is down to 98.0870 from the open at 98.6200. GBP/JPY is down to 124.2595 from the open at 124.5050.
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