Bullish move in Japanese Yen.
Japanese Yen has witnessed dramatic rise over last 2 weeks. And that too after Bank of Japan adopted negative interest rates on Jan 29 with a purpose to weaken Yen further. But instead of weakening of Yen, the reverse happened: Yen made a sharp surge and has strengthened tremendously over last 2 weeks. It is being called as risk aversion trade.
Here's USDJPY Chart
The US dollar to Japanese yen currency pair, is inversely related to the Japanese yen and hence decline in price means strength in Yen
Japan is fighting deflation and the last thing it wants: Strong currency. Strong Yen also erodes corporate profit growth. Here's Japan Nikkei stock market Chart - in free fall mode
Lots of times in market - the moves are not logical. It depends on how traders are positioned and that most of the times determine the reaction.
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers