On Wednesday, the USD/JPY pair is trading near multi-month highs; the Yen is getting more expensive again.
One can only envy the Japanese Yen’s firmness. On Wednesday afternoon, the USD/JPY pair is falling and moving close to 110.40. It is lower than it’s been over a year. On one hand, very soon capital markets will once again need “safe haven” currencies, and the Yen has won back this status recently. On the other hand, internal signals from the Japanese economy hardly inspires the currency equilibrium.
It was the Japanese prime minster, Mr. Abe, who gave an unmeant cause for the currency to “ride a currency rollercoaster” yesterday. He said that the authorities should better stay away from any market interventions in order not to put pressure on currencies. The politician had in mind financial interventions of course, however his words sounded much alike verbal interventions. The Yen has never been afraid of it.
The whole intervention situation itself has run its course many years ago, when market speculators calculated the moves of the BoJ and shook the currency market even stronger.
The statistics published in the morning showed that the index of coincident indicators in February in Japan was 110.3 points, and the index of leading indicators weakened a bit and was 99.8 points. This statistics may be interesting for assessment of the sentiments inside the economic system, but not for trading participants right now: the main driver is the demand for assets of “safe haven”. It will support the Japanese Yen for some time.
This growth of the Yen higher can do a lot of damage to Japanese exporters and worsen budgetary receipts.
RoboForex Analytical Department
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