Why is Jpy getting so strong nowadays even when core machinery orders and adjusted current account turned out in red. Jpy did’t loose the ground.
and on the other side when trade balance for US and CAD and initian jobless claim for US gave a amazing result showed no improvement.
Are you talking about the quick market reaction at the release of the news or are you asking about their long term effect on the currency?
First, what time frame are you looking at? There is a huge difference between daily movements and yearly movements to state that JPY is getting strong. Second, things like core machinery orders and NFP are almost meaningless in predicting long term price movements. You will see a short term news spike and that is about it. The most important fundamental factor, which has an immediate and long term impact on the strength/weakness of a currency, is an interest rate change. Everything else becomes an excuse for banks to hide their position building and for television analysts to pretend they knew why price moved – after the fact.
Actually USD/JPY is strong because japanese economy showed some bad results, keep in mind that not only the results of US will move the price of USD/JPY … its also the results of the japanese yen too …
Hi
Thanks for your reply.
yes i am talking about quick market reaction
JPY is so strong because all the retail traders keep selling it…
They keep selling it because they are buying gold and long on the ausie for short term gain.
The yen is strong because there is a tonne of Japanese cash in foreign investments. With all the bad news from nearly every part of the world Japanese investors are selling their assets (converting assets to cash - i.e. increasing a demand for JPY)
Japan is caught between a rock and a hard place when it comes to dealing with the JPY.
JPY is traditionally considered as a safe haven currency. As long as there is continued turmoil and uncertainty in the world economy, the market will plow into JPY, so the currency strengthens.
When Japan economic numbers are good, the market will also plow into JPY, so the currency strengthens.
It does not make sense but it is the market’s perception that JPY will be safe and will not fail.