Source: ForexYard
Tuesday’s trading saw big moves for the Japanese currency as it appreciated more than any other Major counterpart.
Fresh turmoil in both Italian and Spanish Bond markets assisted the Yen with its climb as well as aiding the U.S dollar.The greenback and the JPY are seen as safe-haven currencies as well as alternative options against riskier assets.
The Yen pushed for higher gains after the Bank of Japan kept its rate on the same level as previous whilst also moving ahead with no further action regarding policy easing.
The Euro as well as the Australian and New Zealand Dollar all experienced losses versus the Asian currency. The 17-nation currency dropped 1.3 percent against the Yen whilst the Aussie dollar dropped 1.6 percent and the Kiwi dollar also experiencing losses of 2 percent.
Despite the Yen’s dominance today, the greenback has shown gains of 4.9 percent over the JPY so far this year, assisted by Japan’s unexpected inflation target as well as a new asset-buying plan from the Bank of Japan.Gradual improvement in the U.S economy is also a key factor in the dollars gains this year.
Another factor which is partly responsible for the Yen’s rise is Germany’s 2- year yields which recently dropped below Japan’s for the first time.
Tomorrow, the Bank of Japan’s monthly report will be published as well as other economic reports including Germany’s 10-year Bund auction,Canadian housing starts, crude oil inventories and the Federal Budget Balance.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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