Tradervox (Dublin) - The Japanese currency was one of the beneficiaries of the election results in Europe as safe haven demand increased the currency’s demand in the market. The yen gained against most of its most traded pears as investors ditched higher yielding currencies for safety. This was fueled by the poor payrolls in the US which were poor than forecasted and the election results in Europe which show a shift to anti-austerity leadership in France and Greece.
As the euro was falling against major currencies on elections in the region, the US dollar lost favor among save haven seekers as US employers were reported to have added the least jobs in six months, which fueled concerns that the world’s largest economy is faltering in its recovery efforts. This also added concerns that the Fed may consider making another round of asset purchases. Investors were more attracted to the yen, causing it to strengthen against major currencies in the market.
Forex analysts have also added their concerns, saying that the US economy seem to be deteriorating hence bringing back to the table the possibility of a third round of quantitative easing. Further, they are adding that the risks associated with the elections in Europe have forced traders to move to the sidelines as they await for signs from the regions; all these events have led to investors choosing the yen as the best bet for the moment.
The Japanese currency strengthened against the greenback by 0.4 percent to trade at 79.85, breaking the resistance level of 80. The yen might be headed to 79.64, which it touched in May 1 and is the strongest it has been since February 21. The yen registered a weekly gain of 0.5 percent last week. Against the euro, the Japanese currency rose 0.9 percent to trade at 104.49.
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