22 Jul 2013
Session Recap: The Japanese Yen rises in the day after Abe
FXstreet.com (San Francisco) - Contrary to the widely expected, the Yen didn't rocket after Japanese election and the Abe victory. In fact, the USD/JPY performed its biggest single day drop since July 10th; the EUR/JPY its worst decline since July 4 and the GBP/JPY since July 16. Why?
As FXstreet.com chief analyst wrote in a recent report, "Economists fear that with a total majority, Abe will lose interest in difficult economic reforms and pursue his nationalist agenda instead, while there’s a chance lawmakers in his own party, some of whom have little appetite for painful but vital reforms, may become stronger to resist change." In other words, investors fear that Abe's same party members would put difficult to the Abenomics.
Meanwhile, the USD/JPY declined below the 100.00 area with the pair losing the battle for the mentioned level and closing around 99.50. The EUR/JPY lost the 132.00 area and it's ending the day at 131.25. The GBP/JPY declined the 152.3, but the pair managed to recover some losses and finish Monday at 152.90.
On other majors, the GBP/USD advanced further and it break above the 1.5300 area to reach levels around 1.5385. The EUR/USD traded higher but remained in between the 1.30/1.32 range with the pair closing at 1.3185. The USD/CAD fell to test July's bottom at 1.0320 and the AUD/USD jumped from 0.9170 to trade above the 0.9250.
Main headlines in the American session:
US: Chicago Fed NA index prints -0.13 in June
Portugal's PM assures bailout program will run its course
US: Existing Home Sales fall to 5.08M in June
September still the date in the diary for Fed tapering
Wall Street opens the week with small gains
As FXstreet.com chief analyst wrote in a recent report, "Economists fear that with a total majority, Abe will lose interest in difficult economic reforms and pursue his nationalist agenda instead, while there’s a chance lawmakers in his own party, some of whom have little appetite for painful but vital reforms, may become stronger to resist change." In other words, investors fear that Abe's same party members would put difficult to the Abenomics.
Meanwhile, the USD/JPY declined below the 100.00 area with the pair losing the battle for the mentioned level and closing around 99.50. The EUR/JPY lost the 132.00 area and it's ending the day at 131.25. The GBP/JPY declined the 152.3, but the pair managed to recover some losses and finish Monday at 152.90.
On other majors, the GBP/USD advanced further and it break above the 1.5300 area to reach levels around 1.5385. The EUR/USD traded higher but remained in between the 1.30/1.32 range with the pair closing at 1.3185. The USD/CAD fell to test July's bottom at 1.0320 and the AUD/USD jumped from 0.9170 to trade above the 0.9250.
Main headlines in the American session:
US: Chicago Fed NA index prints -0.13 in June
Portugal's PM assures bailout program will run its course
US: Existing Home Sales fall to 5.08M in June
September still the date in the diary for Fed tapering
Wall Street opens the week with small gains