The Asia session today seemed to change its recent formula, as what has become the usual wild fluctuations in the Chinese equity markets failed to illicit any serious moves in risk as it had done for most of this week. Most of today’s action in the markets could be attributed to two factors, traders squaring up positions ahead of the Japanese Lower House elections on Sunday, and some yen weakness on the back of a record high unemployment rate of 5.7%. Many reports show the opposition Democratic Party of Japan with an overwhelming lead over the ruling Liberal Democratic Party where they may take control of 300 seats which would in essence break the 50 year hold the LDP has on Japan’s reigns. Many expect a DPJ win to give a short term boost to Japanese equities. EUR/JPY pushed higher as traders sold off recent long yen positions, bringing the pair to a 134.90 high after a humble beginning near 134.10. GBP/JPY did the same, starting the day near 152.00 and topping out close to 152.90 highs on the day. USD/JPY continued higher after hitting a two month low of 93.21 earlier in NY. The Pair eventually reached 93.85 before sagging near 93.70 late in the day. Full text »
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