Yen stabilizes as investors get wary
On May 11, 2007, Tokyo Forex market saw Yen stabilizing after making large growth in the prior sessions. The reason for this is said to be the traders who have cut back on their short term positions.
It is believed that the traders took this action on admonitions that descend in Asian assets as a result of the exits from the U.S. stock markets might accelerate more risk-cutting.
In the situations when the investors witness acute move outs in the worldwide stock markets, there is a high chance that they might decide to cut their risks by not trading deals, in which low-profit currencies like the Japanese Yen are required to finance investment in high-profit currencies and stocks.
But it is believed that the traders will continue to watch the performance of European and U.S. equity markets further along the day to get an idea about the Japanese Yen’s approaching direction.
A few traders were also of the view that if the stock markets show flexibility again, they might recommence the trading by selling Yen again.
Other than that, as of 0525 GMT, the dollar was stable at 119.90 Yen.
Although the dollar had experienced a slight fell to a low as near as 119.72 Yen earlier in the market, it later cut back on the losses, to a certain extent due to the trade done by the Japanese investment trusts. Â
Alongside, the Euro fell to a 161.59 Yen from roughly 161.71 in on late Thursday in the US trading.
Whereas the higher-profit exchanges like the New Zealand and Australian dollars recovered the shortfall against the Japanese Yen by rising about 0.4 to 99.41 yen, after the traders restrained their positions overnight, in carry trade. Â
May 11th, 2007 at 1:00 pm
Great News! Yes dollar will cut back the losses at a later stage, Yen has got temporary ups n downs, but it will settle lower to USD..
Thanks