Yen Advances against Major Currencies

The major currency of Japan, Yen has gained against Euro and it has touched the highest value in the last two weeks. The Euro Zone was shocked to hear about Mario Monti, Italy’s Prime Minister’s intentions of resigning and that boosted speculation over the Government change in this European country. Such a change is expected to derail the ongoing efforts to contain the current debt crisis that this entire region is facing.

Nick Bennenbroek, who is the current head of Wells Fargo & Co.’s Currency Strategy Department, stated that the news from Italy is quite unsettling and has certainly resulted into a new amount of uncertainty in the Euro region. He added that investors are now looking forward to the Federal Reserve. In the Federal Reserve meeting to be held this week, a decision of further bond purchases may be announced by the Central Bank, as predicted by the economists. The event is expected to become positive for risk and negative for USD, according to Bennenbroek’s analysis.

Not only against Euro, but Yen has gained against the Greenback as well. Yen increased by 0.2% against USD and is currently at 82.36 per USD. On the other hand, it increased by 0.2% against Euro as well and is priced at 105.98 per Euro currently, the strongest value since 28th November.

In 2012, Yen has depreciated by 9.5%. Last week, the net-short Yen positions against USD have reached 90326. This is its highest value since July, 2007, according to statistics released by the Commodity Futures Trading Commission.

AUD, the primary Australian currency experienced a fall, for the first time in last 5 days, against Yen. The figures of Chinese import and export possibly have damped the outlook for this South Pacific country’s economic prospects. 1 AUD currently costs 86.41 Yen. Incidentally, the exports of China have seen a rise of 2.9% in last November, if compared to the data of the similar time period last year. However, the imports were more or less unchanged. The data was released by the Customs Administration of China. According to earlier estimates, the exports should have gained 9% and the imports 2%. However, the actual results have not been as promising as it was expected to be and hence, the Australian currency saw setbacks. It is to be seen now whether Yen’s rally is short-lived or it continues to grow.