By: Barbara Zigah
The Japanese Yen surged to a new record high versus the U.S. Dollar in Asian trading today, leaving investors to speculate about possible intervention by the Japanese central bank. As reported at 1:30 p.m. (JST) in Tokyo, the Japanese Yen was trading against the greenback at 76.25 Yen, a high never before seen. More recently at 80.6950 Yen, market players are attributing the pull back to buying by retail margin traders and Japanese importers. At the time of the record high, market players quickly attempted to shed their long positions in high-risk/high-yield currencies.
The strong Yen is likely to result in intervention by the Bank of Japan, as the strong currency could further endanger the now fragile economy. Some analysts are even calling for their intervention, as the markets are experiencing strong volatility and disorder; as one trader described market conditions, “it’s mayhem.” The G7 is meeting later in the global trading day to discuss steps that might be taken to calm market worries.
The Yen was also higher against major currencies. Against the Australian Dollar, the Yen struck a 6-month peak trading at 74.50 Yen, before retreating to 78.05 Yen; this week the Australian Dollar, considered a high-risk currency, has lost more than 7% of its value against the Yen.