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Japanese Yen Weakest as Traders Don’t Feel Need for Safety

January 6, 2021 at 9:24 by Vladimir Vyun

Japanese coinsThe Japanese yen was the weakest major currency on the Forex market today as traders did not feel a need for safety, dumping the currency. Surprisingly, the Swiss franc avoided a similar fate despite also being considered a safe-haven currency.

Traders closely watch the crucial runoff elections in the US state of Georgia, which will decide whether Democrats will be controlling the Senate. Currently, reports suggest that Democratic Raphael Warnock beat Republican incumbent Kelly Loeffler, while Democrat Jon Ossoff leads over Republican David Perdue, though the race is very tight. Democrats need to win both elections to control the Senate. Markets prefer Democrats as their victory would make it easier for President Joe Biden to push for measures to stimulate the economy.

Another positive news piece was the rally of crude oil prices, which supported commodity currencies. Saudi Arabia agreed to cut its production more than was expected to compensate for a modest increase in output from Russia and Kazakhstan. Market analysts are worried, though, that the spread of the new coronavirus strain, which lead to stricter lockdowns in countries around the world, will limit demand for energy and fuel, and thus hurt prices for crude.

As for news from Japan itself, the Cabinet Office reported that the Consumer Confidence Index dropped to 31.8 in December from 33.7 in November. The actual figure was below the median forecast of 32.6.

USD/JPY rose from 102.70 to 102.83 as of 9:22 GMT today, bouncing from the daily minimum of 102.59 — the lowest level since March 10. EUR/JPY jumped from 126.31 to 126.82, rebounding from the session low of 126.14. CHF/JPY gained from 116.89 to 117.28.

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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