The major currency of Japan, Yen has increased against the USD for the 2nd straight day, thereby extending a rally from a figure which was the lowest in the last 29 months. The risk appetite for Yen has decreased gradually and investors believe that the 3-month slide of Yen has already incorporated the proposed stimulus measures, thereby, helping the currency to extend.
Not only against USD, but Yen experienced surge against all of its 16 major counterparts. The Finance Minister of Japan, Taro Aso has stated that Japan will continue to buy the Euro-dominated sovereign debt so that the weakened currency of this Asian country can be revived. Among the other major currencies, Euro suffered a drop and is currently nearing the 50-day moving average of $1.2995. The currency has declined for the 1st time in last 3 days. On the other hand, the major currency of Sweden, Krona went down as the policy makers of the country announced that they are thinking of a deeper interest rate cut.
According to Peter Gorra, who works as the Chief Dealer for BNP Paribas SA, Yen has already lost 5%-7% of its value in the last few weeks. He added that currently Yen is a bit on increasing mode and this may continue for another 50 to 100 basis points. After that, the currency may devalue further and that situation will continue for long term. Incidentally, Gorra mentioned that Yen may go down as much as 90 per USD. If this happens, that will mark the weakest value of Yen in the last 3 years.
The Yen is currently priced at 87.17 per USD after increasing its value by 0.7%. On 4th January, the currency experienced a slide to 88.41, its weakest value since July, 2010. On the other hand, Yen gained 1% to be priced at 114.05 per Euro. This shared currency of the Euro region experienced a slump of 0.3% and is at $1.3084 currently.
Over the course of last 90 days, the Yen has gone down by 12%. This is the worst performer in that time frame, if all the developed nation currencies are considered. Coming to other currencies, in this time frame, USD, the major currency of US, also went down by 0.4%. Euro however showed improvement of 0.6%.