Dollar and Yen floating aimlessly on new year’s eve

The US Dollar floated today near its 16-week highs due to a generally weak Yen. Due to the holiday, low volume of trading in the forex markets along with general weakness in the Yen, contributed to keeping the Dollar up near its highs and the Yen languishing.
The Yen has been weighed down lately on account of weak inflows of remittances due to a rather expensive Yen that reduced the value of goods exported abroad. In addition, lack of optimism about the Japanese economy, along with low interest rates and concerns over fiscal health are not helping the Japanese currency. S&P has also hinted at dangers to the stability of the economy in Japan.
Traders were found to be mostly squaring off and closing positions due to year ending and focusing on positive signs from the US economy. There isn’t much news at the time of writing this report, which follows in line with low trading volume due to the year-end.

In the absence of major news, traders continue to square their books at year-end and react positively to dollar-supportive U.S. economic data. Ongoing doubts concerning Japan Airlines and the company’s possible bankruptcy are having a negative impact on the yen. Standard & Poors warned Japan’s “AA” credit rating could be lowered if Japan fails to stabilize its debt levels.