JPY Rises As Europe and America Dissapoint

May 15, 2014 Share Print 1

The yen rose against all of its 16 major peers as reports showing a weaker-than-forecast European gross domestic product and an unexpected decline in U.S. industrial production fueled concern about the pace of economic growth, increasing demand for Japan’s currency as a haven.

The 18-nation euro fell earlier to the lowest level in 11 weeks after European Central Bank Vice President Vitor Constancio said policy makers are prepared to add further monetary stimulus, if needed. Japan’s currency rallied as the nation’s first quarter economic growth exceeded forecasts, while stocks declined on the weak U.S. manufacturing report and Treasuries rose as traders reversed bet a growing economy would boost interest rates. India’s rupee rallied to the highest in more than nine months before election results. A measure of global foreign exchange volatility rose to the highest level in two weeks.

“It feels a little bit of a risk-off scenario,” Fabian Eliasson, head of U.S. currency sales in New York at Mizuho Financial Group Inc., said in a phone interview. “Reading into the data, it remains a risk for U.S. GDP growth.

The yen climbed 0.5 percent to 101.43 per dollar at 11:58 a.m. New York time, reaching the strongest level since March 19. The Japanese currency rose 0.5 percent to 139.11 per euro. The shared European currency was little changed at $1.3713 after it weakened to $1.3648, the lowest level since Feb. 27.

via Bloomberg

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.