Japanese Yen’s Safe Haven Appeal Dips as Dollar Strengthens
Early on Monday, the Japanese yen is trading lower as the safe haven appeal of the currency dips lower, following a rally in stock markets over reduced fears of an economic recession. At the time of writing, USD/JPY is trading at 106.34.
Over the weekend, China’s central bank PBOC rolled out reforms to its interest rate which helped lower corporate borrowing costs. Meanwhile, the German Finance Minister Olaf Scholz also hinted at a possible stimulus offering to revive its weakening economy. Eurozone’s largest economy is considering taking on debt to protect its economy over rising global trade tensions.
On Friday, US bond yields reversed following their inversion that had sent financial markets into a state of panic over a possible recession looming ahead. This helped improve the sentiment and sent Wall Street stocks rallying higher and caused the US dollar to strengthen to a near two-week high against major currencies.
The improvement in market sentiment and the strengthening of the US dollar have caused a rally in USD/JPY as investors move their money towards riskier assets.
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