FRX: Yen Benefits from Investment Shift amid Global Debt Woes
The Japanese yen gained yesterday against almost all of its currency rivals as debt woes in the United States and Europe fostered an environment of heavy risk aversion, driving many investors into the safety of physical assets and low-yield currencies, like the yen. Despite Japanese reconstruction struggles, the island economy's currency has gained substantially from shifts into and out of carry trades, as well as the sudden risk averse environment in the market these past several trading days.
With today's economic calendar centered on European manufacturing and services inflation reports, most traders will be evaluating their portfolio stance in regards to euro zone debt and outlook. Over-exposure to European markets may be harmful in the short-run since risk aversion is making such investments appear unappealing to day traders. The yen may make solid gains this week as a result of this market mood.
