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Positive Depreciation of the Yen Enhances Business Opportunities
the USDJPY pair reaching an upper level of 135 yen.
“Positive Depreciation of the Yen Enhances Business Opportunities”
During the recent weekend, the University of Michigan conducted a comprehensive consumer survey that unveiled inflation expectations surpassing initial forecasts for both short term and long term periods. This unforeseen development resulted in a notable strengthening of the US dollar. Consequently, the trading week commenced with the USDJPY pair reaching an upper level of 135 yen. While a slight adjustment occurred in the morning, briefly pushing the pair down to 135.59 yen, it swiftly rebounded and ascended to 136 yen due to the execution of significant dollar buying orders at the reference rate. Despite some consolidation after this point, the support around 135.70 yen remained resolute, prompting yet another attempt to achieve the 136 yen mark before noon.
In the afternoon session, the USDJPY pair once again surpassed the 136 yen level, buoyed by the positive performance of the Nikkei 225 Index and an upswing in risk appetite. This favorable market sentiment led to increased yen selling activities. The pair soared above the morning’s peak, attaining levels around 136.20 yen.
Simultaneously, during the morning trading session, the EURUSD pair displayed a correlation with the rise in USDJPY. Initially dipping below the 1.0850 threshold, the pair swiftly reversed course and exhibited notable strength. The surge in euro purchases against the yen provided substantial support for the pair.
Furthermore, cross yen pairs demonstrated a general upward movement. Starting the day around 147.20 yen, the EURJPY pair reached an afternoon high of approximately 148 yen. Similarly mirroring the USDJPY dynamics, yen depreciation driven by an increased appetite for risk contributed to the appreciation of cross yen pairs. Notably, the AUDJPY pair, which initially traded around 90.10 yen in the morning, experienced a remarkable surge, climbing to 91 yen. This development highlights the significant trend of yen depreciation in the market.
The favorable depreciation of the yen offers promising prospects for economic and business activities, providing favorable conditions for international trade, export oriented industries, and foreign investment.
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