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.

If you want to comment on the Japanese yen’s recent action or have any questions regarding this currency, please, feel free to reply below.

Stocks Rally Push Dollar Down as World Economy Improves

The month of May posted the biggest losses for the U.S. currency in a one-year period against the euro, as equities markets continue to rise on optimism about improvements in the global economic situation.

The greenback lost ground against currencies around the world, and after South Korea affirmed that its state pension fund will sell Treasury bonds and diversify their investments to other assets, the Australian dollar and its New Zealand counterpart rose sharply against the North American currency. In Europe, the dollar lost ground against the pound after an unexpectedly favorable report on house pricing in the United Kingdom damped demand for refuge currencies. Among the main currencies, the Japanese yen also slid together with the dollar, also due to improved confidence in markets spurring risk appetite among traders.

The dollar and the yen are under pressure, according to financial consultants. Instability still penetrates several sectors of the world economy, but signs of recovery coming from multiple reports in different corners of the globe brought risk appetite to markets sooner than what most economists could predict, and currencies like the yen and the greenback, regarded as safe investments, are threatened in a new scenario of diminished risk aversion.

EUR/USD traded at 1.4030 from 1.3825, The GBP/USD currency pair also rose from 1.5935 to 1.6087. AUD/USD rallied to 0.7941 from 0.7800.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.