Yen Declines Further as Investors Purchase Assets Overseas

The yen hit a 8-week low against the dollar and also lost ground against the euro, as Japanese investors, driven by a new wave of confidence on world markets, return to overseas investments.

The Ministry of Finance in Japan affirmed that national investors had the highest rise in foreign bonds purchases during the current month, this declaration reflected immediately in the Japanese currency market, making the yen to lose against all of the 16 most-traded currencies. The yen also lost ground against high-yielding currencies in Asia, such as the Malaysian ringgit and the South Korean won. Standard&Poor’s raised the outlook for the New Zealand’s debt rating, pushing it sharply up in the Pacific trading area.

Japanese investors are more comfortable to take riskier positions, since the global financial situation has been reporting sequential signs of recovery, the attractiveness of higher-yielding currencies is once again alluring for Asian traders. Analysts confirm that the Standard&Poor’s report on New Zealand may bring interesting profits for traders willing to enter long in the NZD/JPY currency pair. For the time being the safety profile of the yen as an investment is strongly not recommended among trading experts.

USD/JPY rose enormously from 95.15 to 96.79 and following the same trend GBP/JPY traded at 152.05 to 154.31 and NZD/JPY also rallied from 59.05 to 60.05.

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British Pound Climbs Against Euro as Confidence Emerges

The Great Britain Pound hit a six-month high against the Eurozone currency as domestic consumer confidence rose to a two-year high, indicating that recession might soon be over.

The British currency reached the $1.66 mark and the highest level against the euro since last December, after an index of U.K. service industries posted the first expansion in a period of more than twelve months. The Australian government reported that the economy unexpectedly grew in the first quarter, improving traders’ confidence globally that other countries may follow Australia’s economy, posting positive numbers for the next quarters. The pound sterling suffered massively the consequences of the credit crunch, reaching the point of being traded one to one against the euro, but since domestic and international data indicated that the global slump is easing, the pound entered a strong recovery trend.

Two main reasons would be behind the pound’s rebound, according to specialists. The rise of confidence in world markets is obviously helping the pound to reach higher levels, but the fact that the greenback is under pressure could be the main reason behind the British currency uptrend. Even if the national data in Britain is still not very optimistic, the actual drive in international markets is favoring the pound for the moment.

EUR/GBP fell to 0.8594 from 0.8634. GBP/JPY remained stable while GBP/USD rose to 1.6552 from 1.6400.

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