May 30th 2007
Japanese Yen Slides Further
The Japanese Yen continues to slide against the both USD and the Euro, despite Japan’s purportedly strong economy. The release of dovish inflation data was music to the ears of Japan’s Central Bank, which seems intent on leaving interest rates frozen at .5% for as long as Japan’s economy will support it. Meanwhile, volatility is way below its historical average, and traders remain committed to the carry trade. In addition, currency futures prices indicate that traders believe the Yen will fall further in the near-term. Bloomberg News reports:
“In times of low volatility and plenty of cash, people tend to put on carry trades,” said Meg Browne, a senior currency strategist.
Read More: Yen May Reach Record Low Versus Euro as Prices Forecast to Fall
