Forex Alert: USD/JPY Losing Ground

on Nov 13, 2012
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iNVEZZ (Tokyo) As reported by FXstreet on November 13, the USD/JPY pair has declined by as much as 0.24 percent to 79.30, with the next support level viewed as 79.07. The yen has strengthened against all its major peers, impacting the earnings of Japanese exporters.

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**Yen’s Safe Haven Appeal**
Although the yen lost ground on Monday following Japan’s GDP data, which showed that the world’s third largest economy had contracted in the third quarter, the yen reversed earlier losses, with investors showing their preference for safe haven currencies. The Eurozone events and particularly the delay in the decision as regards Greece’s additional funding have intensified market pessimism and have prompted traders to unwind positions in riskier assets. While safe haven gains have also benefitted the greenback, which is also traditionally viewed as a haven currency, the yen is currently winning the safe haven currency race against the US dollar.

**USD/JPY to Rise on Volatility, Bank of Japan Speculation**
Bloomberg, however, reports that according to median estimates of more than 35 strategists, the dollar is likely to strengthen to 83 versus the yen, with rising market volatility prompting investors to seek a haven in the world’s reserve currency. “Japan’s economy looks bleak,” points out Kengo Suzuki at Mizuho Financial Group (TYO:8411), as quoted by Bloomberg. “The pressure for the BOJ to ease further is likely to increase, lending support to the dollar-yen.”

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