JPY Strong movement, why ??

Intunes · #1 12-11-2007, 09:07 PM

11 of December 20:00 GMT , GBP/JPY and EUR/JPY, CAD/JPY fell around 250 pips each pair, USD/JPY 150 pips, there was no news related to JPY to create such a strong movement (cant see them in the site), anyone could explain why this happened ?

Thanks.

ghaze · #2 12-11-2007, 10:45 PM

Quote:

Originally Posted by Intunes

11 of December 20:00 GMT , GBP/JPY and EUR/JPY, CAD/JPY fell around 250 pips each pair, USD/JPY 150 pips, there was no news related to JPY to create such a strong movement (cant see them in the site), anyone could explain why this happened ?

Thanks.

Good question Intunes, I don't know either why this is happen but may be this is related to their economic. That I know in the end of years Japan industries is busy they need to import goods for producing so the government tried to strengthening their currency so they buy cheaper. This is my simple analysis, I think anyone have a good analysis than me...

makaro · #3 12-12-2007, 07:15 AM

Quote:

Originally Posted by Intunes

11 of December 20:00 GMT , GBP/JPY and EUR/JPY, CAD/JPY fell around 250 pips each pair, USD/JPY 150 pips, there was no news related to JPY to create such a strong movement (cant see them in the site), anyone could explain why this happened ?

Thanks.

This was really more of a reaction to the Fed cuts implication for US equities. Basically with the cut for Fed Funds at 25bps and Discount Rate at 25bps (against markets desire for a deeper 50bps or 75bps) market thought that you will have more risk aversion, which usually means stronger yen as carry trades get taken out of the market. If you look at US equity indices noticed a lot of drop there as markets believe Fed's move is a case of too little too late, failing to address the current liquidity crunch.