Japanese Yen: Bernanke May Make or Break Carry Trades On Friday

The Japanese Yen rallied across the majors early this morning as European stock markets opened sharply lower, adding to already-jittery sentiment in the global markets.

The low-yielder subsequently pulled back later in the day, though it failed to do so against the US Dollar. Indeed, broad weakness in the greenback weighed quite heavily on the USD/JPY pair, and it is worth noting that downside risks remain for the Japanese yen crosses linger. The financial markets remain on edge, especially on concerns about the health of the two US mortgage giants Fannie Mae and Freddie Mac, and with Federal Reserve Chairman Ben Bernanke scheduled to speak on financial stability on Friday morning, risk sentiment could be severely affected. Thus, traders should continue to keep an eye on technical levels, as the Japanese Yen tends to obey them over Japanese fundamentals.