By: Barbara Zigah
As predicted by many, the ruling party in Japan lost yesterday’s election and won only 44 of the contested 121 of the Upper House seats; in order to maintain the majority, the Democratic Party of Japan or DPJ needed to win a minimum of 56 seats. The political loss suggests that Naoto Kan, the Japanese Prime Minister will have a difficult time trying to improve the export-driven Japanese economy, and many investors worry that the economic recovery will be slowed further. As a result of the election outcome, the Japanese Yen slipped in Asian trading today, down against both the U.S. Dollar and the common currency Euro. As reported at 3:50 p.m. (JST) in Tokyo, the Yen traded against the U.S. Dollar at 88.94 Yen, and against the Euro it stood at 112.06 Yen. According to a forex dealer in Tokyo, one of the major trust banks in Japan was selling off their Yen holdings in a big way; he also noted that foreign investors could not be expected to buy Yen given the uncertainty of the Japanese political climate.
This week, investors will once again turn their attention to the U.S. in advance of the release of key earnings reports. Some investors reported that they are selling off the Euro versus the greenback in preparation for a volatile currency market. Last Friday in New York, the Euro was trading against the U.S. Dollar at $1.2650; in Asia today, the Euro traded at $1.2596.
In the Wake of Japanese Election, Yen Falls Against Greenback/Euro
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.