What’s Driving the JPY?

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By Giles Coghlan, Chief Currency Analyst at HYCM

The JPY is a safe haven currency. When the market is feeling risk averse then the JPY is bought. When the market is feeling like it wants to take on risk then the JPY is sold. The Bank of Japan’s policies and Japanese economic data are currently not being traded by the markets, even though the Bank of Japan adjusted their forward guidance at their October meeting, stating that they expect short and long term rates to remain at current or lower levels for as long as needed.

For traders, watch the prevailing risk moves to push the JPY.

  • When risk is off: Expect JPY buyers
  • When risk is on: Expect JPY sellers

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