YEN under stress Friday


The Dollar and Yen have come under simultaneous pressure against most other currencies. The biggest losers have been against the euro and Australian dollar. EURJPY was a notably gainer during the Tokyo session, with some narratives pointing to corporate demand relating to Japan’s Mitsubishi UFJ Financial Group’s purchase of aviation financing business of Germany’s DZ Bank. The rally has continued during the European session with a high at 126.62. A rally in European stock markets, along with a near 0.5% gain in S&P 500 futures, meanwhile, have underpinned the Aussie dollar, and AUDJPY in particular, which is presently showing a 0.6% gain on the day. AUDJPY is now trading at near four-month highs, which reflects the positive impact China’s stimulus measures and accommodative monetary policies among the major central banks are having on global markets (the AUDJPY cross correlating with these given Chinese demand for Australian exports and the high-beta characteristic of the cross). EURUSD and EUR-JPY have carved out fresh 17-day and three-week highs, respectively. While the dollar has been trading softer against most currencies, the yen has been trading even softer, the upshot of which has been USDJPY gains. The pair has printed a one-month high at 111.96.

Stuart Cowell

Head Market Analyst

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