Forex News
May 10, 2013 @ 2:08 pm

Yen hits 4-year low vs. USD

The yen plunged to its lowest in more than four years against the dollar on Friday as the greenback rallied broadly on US data while Japanese data showed more buying of foreign assets.

USDJPY broke above the key 100 yen level on Thursday and continued to surged higher as the yen weakness was made worse on expectations that the recent strong US data will prompt the US Federal Reserve to taper off quantitative easing, which is dollar-negative.

Last week’s strong nonfarm payrolls and yesterday’s sharp drop in US jobless claims show signs the US labor markets is recovering, giving more leeway for the Fed to ease off bond purchases and other simulative measures.

Meanwhile in Japan, data earlier today showed Japanese investors increased buying of foreign bonds in the last two weeks. This is an important signal for yen bears as local bond investors move away from Japanese bonds affected by QE and prefer foreign bonds.

Yen slid nearly 1 percent as USDJPY climbed to 101.72 , the highest October 2008.

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