USDJPY Retreats from Seven Year High

The dollar fell back below ¥118 in Tokyo trading on Friday on a verbal intervention by the government after it briefly shot up to a seven-year high slightly below ¥119 the previous day.

At 5 p.m., the dollar stood at ¥117.56-57, down from ¥118.57-59 at the same time Thursday. The euro was at $1.2544-2545, slightly up from $1.2535-2535, and at ¥147.48-49, down from ¥148.68-69.

The greenback plunged as low as around ¥117.30 after Finance Minister Taro Aso told a press conference in the morning that the yen had weakened “too fast” against other major currencies over the last week.

“The remarks by the finance minister warning against a rapid fall of the yen had a greater-than-thought impact, as profit-taking activities were strengthening after the dollar soared to near ¥119, apparently overshooting, and then stalled,” an official at a foreign exchange margin trading service provider said.

“The market appears to be calmer” after the greenback has failed to top the ¥119 threshold, an official at a major securities firm noted.

In the afternoon, the U.S. currency temporarily pared losses to almost recover the ¥118 level, as the benchmark Nikkei stock average recouped losses to finish in positive territory.

via Japan News

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

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.
Alfonso Esparza