Yen momentum fades
Published: 30 Mar at 9 AM
The yen fell from multi-week peaks on a number of currencies in Asia today as investors chose to book profits because demand linked to Japan’s financial year-end was fading, reports Reuters.
The last week has been dominated by the Japanese currency’s repatriation and position squaring that breached several key stop-loss levels. The greenback bought 82.33 yen, having dropped to 81.90 - a three-week low - on Thursday, and the euro was at 109.54, after bouncing back from 108.83, its lowest in a week.
The yen also fell against commodity-linked currencies, as the Australian dollar stood at 85.36 yen, having recovered ground following its six-week low of 84.55. And against the Canadian dollar the yen fell from three-week highs, last standing at 82.56.
As the Japanese currency has eased ahead of the deadline on 31 March, investors can return to using the safe-haven unit as the carry trades’ funding currency, said dealers. Sydney-based Arab Bank Australia trader David Scutt said that European stocks fell heavily overnight but when markets in the US began to recover, there was a switching from the yen to other currencies, especially commodity currencies.
The Japanese currency has been the carry trades’ funding currency of choice since the Bank of Japan’s decision to ease policy in February.