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USDJPY Falls to Weakest Level in Over a Month
Wednesday, 07 November 2007 20:43:45 GMT  |  Kathy Lien, Chief Strategist
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With the Dow down 360 points today, Japanese Yen crosses suffered serious losses.  The biggest loser was CAD/JPY which dropped 2.5 percent.  For the past two weeks, USDJPY had been trading in a range but today it broke to the downside and is closing in on its 2 month low. 

At this point we expect further weakness since the strong move in the Dow will likely lead to follow through selling of Asian and European equities.  The liquidation of the Japanese Yen crosses has been primarily driven by the liquidation out of USDJPY.  The reason why China’s comments have such a profound impact on the Japanese currency is because the Yen tends to be a proxy for Asian currency strength and weakness.  Tonight we have machine tool orders and money supply; neither of which will be particularly market moving. 

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