Early in Friday’s session the Japanese Yen (JPY) climbed against the Pound (GBP) and briefly touched its highest level in five-months against the Euro as investors were worried by geopolitical concerns following the downing of a passenger airliner in Ukraine and the launch of a ground offensive by Israel in the Gaza strip.
As the session progressed however the Japanese currency weakened and fell for the first time in four days against the Euro as demand for safe haven assets softened despite the geopolitical situation.
The events in Ukraine and Israel have not been seen as being market moving events and as such emerging market and riskier currencies recovered ground. However investors and traders will be keeping a close on the situations in case there is any further escalation.
US senator John McCain warned that there would be ‘hell to pay’ if it emerges that Russian backed rebels did shoot down the airliner.
The Japanese Yen in particular fell following downbeat remarks made by the Bank of Japan and as the Central Bank revised down its expectations for wage data. Some BoJ policy makers warned that tough global competition is affecting the nation’s exports.
‘A few members pointed to the possibility that structural factors such as the declines in Japanese firms competitiveness and the shift of their production sites overseas could be influencing exports to a larger degree than expected,’ said the minutes of the BoJ’s June 12 to 13 policy meeting.
Following the publication of the minutes the Japanese Central Bank also revised down its expectations for average wages to a year on year gain of 0.6% from 0.8%.
JPY Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Japanese Yen,
,US Dollar,0.0099 ,
Japanese Yen,, Pound Sterling,0.5761 ,
Japanese Yen,,Euro,0.7288 ,
Pound Sterling,, Japanese Yen,173.4100 ,
Euro,, Japanese Yen,137.1100 ,
US Dollar,, Japanese Yen,101.3600 ,
[/table]
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