Greenback closes in on ¥114
On Monday, the Japanese yen weakened against the greenback as well as other major currencies in Asia trade, as reduced risk sentiment enabled investors to sell the haven yen.
The evergreen buck advanced to ¥113.89 right after hitting ¥113.29 in New York late Friday.
Investor sentiment has become positive after a surge in commodities as well as banking stocks, which elevated EU and US stocks on Friday. This positive mood has ended up with an abrupt recovery in the benchmark Nikkei Stock Average, which demonstrated a 6% soar.
This stock market pickup caused a rebound in the greenback against the major Japanese currency, considered to be a traditional haven asset. Despite the BOJ’s decision to introduce the country’s first negative interest rates, the yen had recently strengthened against the US dollar. On February 11, the buck dropped to ¥110.98 - a 15-month low.
Oil prices recovered a bit and stocks of banking sector in America and Europe stopped decreasing. It’s clear that if this trend keeps going in this direction, market participants will be able to avoid another sell-off. Furthermore, it might take up to three months or even more for a full-scale rebound to take place.