The yen has been much weaker today following the Asian stock market rally a few hours ago. This is in contrast to the gains which we saw for the currency during yesterday’s session. There is a lot of risk appetite in the forex market. If you did not know this before, then it is vital you understand now. This will assist you while you trade the USD/JPY and other leading pairs this Wednesday.
The yen has been one of the strongest currencies in the past few years, but it has suffered a setback since the Bank of Japan went ahead with very aggressive stimulus measures a few months ago. This has really put a lot of downward pressure on the Japanese currency. Traders have decided to sell the yen on all fronts, even though it did soar temporarily on Tuesday.
Traders tend to sell haven currencies in times of risk taking. This is exactly that we are seeing today. The biggest losses have been made against the euro, as investors prefer to put their funds into higher-yielding currencies today.
With economies in Asia showing significant improvement, this has given traders the all clear to ditch the yen and take some big risks when it comes to the forex market today. As a result, the yen’s losses have been extended.
Traders are now wondering if the yen’s bad fortunes will continue later on. Much will be dependent on the economic news that is published from the leading economies. Investors hope that there will be another rally in European and U.S. stocks in order to drive the yen lower than its current level.