Japan Unease Over Yen Gains

Daily Forex Fundamentals | Written by Investica | Oct 23 08 11:48 GMT |

Yen strength will be an increasing source of concern for the Finance Ministry, increasing the potential for at least verbal intervention to limit further gains. There was some temporary relief from the yen advance in Europe on Wednesday, but the dollar failed to regain the 100 level and there was renewed yen support as the Dow Jones index was subjected to renewed selling with the dollar testing 2008 lows below 98. The trend continued in Asian trading on Thursday with regional equity markets weakening. The latest Japanese trade surplus also recorded further weakness in exports with annual growth held to 1.5% as shipments to the US continued to weaken Markets will be on increased alert over Ministry of Finance rhetoric in the near term given the greater risk of official action to stabilise markets. Volatility has spiked to extreme levels, especially against European currencies, which will cause concern and there will be greater unease over the economy. There is likely to be some speculation over a move to cut interest rates and the dollar attempted to recover from lows below the 97 level with comments that markets were being watched closely. Investica http://www.investica.co.uk Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.