The Japanese Yen moved broadly higher following a steep drop in China’s key equity markets which prompted forex traders to seek out the safe haven currency. In an effort to rein in rising housing costs, the Chinese government late last week announced new tightening measures for the housing market which resulted in a 2.9% rout in the Shanghai Composite Index. Coupled with unexpectedly poor manufacturing data last week, China’s economic uncertainty has prompted the safe haven inflows to the Japanese Yen which surged broadly. As reported at 12:11 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 93.32 Yen, a drop of 0.4%, while the EUR/JPY pair was trading at XXXX; against the Australian Dollar, a growth-linked currency, the Yen gained 0.7% to trade at 94.76 Yen.
As a result of risk aversion the common currency Euro was also under pressure, holding close to a 2½ month trough with the EUR/USD pair trading 0.1% lower at $1.3017, only a slight improvement from Friday’s low trade of $1.2966, a level which had not been seen since early December. Meanwhile, the inflows to safe haven currencies helped to boost the U.S. Dollar Index, which held near to a 6-month peak at 82.285 .DXY, not far from Friday’s high of 82.509 .DXY.
Safe Haven Demand Drives Yen Higher
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.
... Read more After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.