September 2, 2010
After two consecutive days of wins, the yen decided to take it easy yesterday and give back some of its gains. It fell against most major currencies when optimistic economic data from China and Australia that printed early in the day inspired risk appetite among investors. EURJPY reached a high of 108.62 before settling at 108.16 by the end of the US trading session.
Apparently China’s manufacturing PMI was reported to have rebounded to 51.9 from 49.4 while Australia grew 1.2% during the second quarter of this year, higher than expectation and an improvement from the revised up 0.7% the quarter before.
Time to sell the yen? Hah, not so fast; we all know how fickle traders are! If there’s one thing we have seen in the past weeks, it is that traders always seem to find a reason to buy the yen up. This relief rally might just serve as a chance for traders to buy the yen at cheaper levels.
No important data coming out Japan again today, so the yen’s price action will most likely be driven by news coming out of other major economies, especially the US and euro zone.
"The only cable I watch is the pound baby."