In a nutshell – volatility, volatility, volatility.

This week we saw the reemergence of the Rising Sun, as the Japanese Yen finally made good on its promise to increase its value. For months, concerns about carry trades have kept the Yen in an almost a redundant pattern, with large investors buying the Yen only to turn around and invest the sum in a currency with much higher interest. If news or any fear of a rise in the Japanese currency occurs, investors quickly sell off causing the Yen to weaken further. Then when fears diminish, buyers rush the market to continue with business as usual. This week Japan had strong numbers, while the rest of the world posted weaker sentiment. In addition, once carry trades started to unwind, the train just kept chugging and finally bottomed out below 117.00 for the first time since December. Another factor that boosted the Yen this week was the decline of the equities in the Far East. Profiting from an over 8% loss in the Chinese stock market, the Yen took over 400 points away from the US Dollar in a severe slide. This was the scenario of a perfect forex storm. Strong internal numbers combined with a major news break lead to a wonderful rise in the Yen. As we look to the weekend, the USD/JYP finished out at 116.83, the EUR/JYP closed at 154.13, and the GBP/JYP was at 227.02.

Enjoy the Weekend!

David Hilgeman, XPRESSTRADE Analyst