The Japanese Yen is stronger across the board for no
reason other than the panic selling in US stocks. There was no economic
data released last night and machinery orders are the only piece of data due for
release this evening. We continue to stress that the Yen crosses will take
its cue from the movements in US stocks. Although the Shanghai index
rebounded on Thursday morning, the sharp sell-off in the Dow today could prompt
a reversal in Chinese stocks. Risk aversion is rising and carry trades are
the primary victims. Further losses are very likely, but we will probably
not see major losses as many central banks are still on track to raise interest
rates this year. The Bank of Japan on the other hand has no reason to
alter rates as the strength of the yen will automatically tighten their
economy.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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