The Japanese yen (JPY) began trading in a bearish direction against most of its currency rivals yesterday after the Bank of Japan (BOJ) released data which showed the Japanese economy contracting by 0.9% so far this quarter.
After a week of ups and downs, the Japanese yen now appears to be in a weaker position and is taking a beating by traders in today’s early hours. Adding to this bearish sentiment is also the revised industrial production figure which was released this morning slightly lower than expectations.
The dominant stance of risk aversion overarching this week and last had many traders moving towards the yen until yesterday. The dominant stance now appears to be a flight to other safe-havens like the Swiss franc (CHF) and, in many instances, the Scandinavian kroner (i.e. SEK, NOK, DKK).
As of this morning, the USD/JPY has moved up over 80 pips from 80.00 to 80.88. Japan’s tertiary activity was published yesterday morning and also revealed a severe downturn of approximately 6.0%.
This morning’s GDP figure was another bearish marker on the currency and so far traders are moving away from their JPY investments as a result. Should tomorrow’s monetary policy statement give further dovish statements, the yen may find itself losing value against its primary currency rivals prior to this week’s close.
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