Yen Heads North on Speculation of Slower Global Recovery

Wednesday, October 28, 2009, 10:49 GMT

JPY is headed north after news suggested that the demand for high yielding assets will reduce as the global economic recovery will take more time than anticipated. Coupled with the consensus that the rally of global stocks and commodities, which started 6 months back, will not sustain for too long, the news gave Yen the advantage over its counterparts as it rose against all of the 16 most traded currencies.

JPY peaked at 134.85 against the Euro and 91.15 against the Greenback. Greenback also fell after fresh concerns of the US banking sector. The economic growth of the US is also lagging behind the historical averages. Unemployment in Germany, Europe’s biggest economy, rose to 8.3% for October and CPI fell. As a result, there are no signs of increase in interest rates in that region raising fresh concerns over the pace of economic recovery in the Euro zone. AUD also dropped as inflation has fallen, hence, any interest rate hike in the near future is unlikely.