With investors turning away from the safe-haven Yen, Japan’s currency declined against several of its most traded counterparts, including the Pound.
The Japanese Yen exchange rate was in the region of 169.4530 Yen to one British Pound as of 10:50 GMT
The safe-haven asset slid against peers like the Pound and US Dollar overnight as investors processed the pro-taper comments issued by Federal Reserve Bank of St Louis President James Bullard.
Bullard asserted that tapering should occur soon and the US Dollar strengthened as a result.
The Yen has been trapped in a bearish relationship with the ‘Greenback’ since the end of last week, when the US non-farm payrolls report surprised to the upside.
As New York-based currency expert Fabian Eliasson pointed out; ‘We’re still riding the Friday numbers. We’re just getting clarity and listening to the Fed speakers.’
Given that recent positive data has led to a bit of a risk-on environment (a circumstance which supports equities) the Yen is likely to post further declines against the US Dollar.
The GBP/JPY exchange rate hit a high of 170.2320
The Yen was also adversely affected by domestic data.
While Japanese machine tool orders surged by 15.4 per cent in November, year-on-year, a measure of domestic consumer confidence rose by less-than-forecast, coming in at 42.5 rather than the 43.0 expected.
That being said, currency strategist Junya Tanase did issue this warning regarding the Yen’s current weakness; ‘Given that investors have piled up huge Yen-selling and Japanese share-buying positions solely on hopes of Abenomics, there is risk of reversal in these positions should Abe lose popularity.’
Although the Yen went on to pare declines, as European trading progressed the Pound was boosted by the news that UK industrial and manufacturing production increased in October.
The GBP/JPY pairing could rally further if the UK’s NIESR GDP estimate impresses.
Meanwhile Japanese machine orders figures could trigger Yen volatility during the Australasian session.
Current Japanese Yen (JPY) Exchange Rates:
< Down > Up
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 103.1500 <
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 169.4530 <
The Euro/Japanese Yen Exchange Rate is currently in the region of: 141.8240 <
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 85.4826 <
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 94.0303 <
(Correct as of 10:50 GMT)
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