The Japanese yen was easily the biggest gainer of the day, surging 3.32 percent against the US dollar, nearly 5 percent versus the Canadian dollar, British pound, and Swiss franc, and a whopping 9.80 percent against the Australian dollar.
Risk aversion and subsequent carry trade selloffs were behind the move, which is why high-yielding currencies like the New Zealand dollar (-7.08 percent) and Australian dollar got hit so hard. With the credit crisis still hitting the world’s financial markets quite hard, true financial stability is not likely to come soon. This leaves traders highly unlikely to pile back into the carry trade. My long-term fundamental bias for the Japanese yen: bullish. Related Article: How to Trade and Survive in Highly Volatile Markets Check out Daily Fundamentals in its entirety for analysis and outlooks on the US dollar, euro, British pound, Japanese yen, and the commodity dollars.