During trading session on Friday, the Japanese currency hit its two-week low, as the investors became more confident regarding the development pace of the decline in global economy. This caused more appetite among investors for trading riskier currencies.
Japanese trading session was not very active due to Golden week holidays in Japan, as well as May Day holiday in many European countries. The yen also lost its positions due to negative information regarding consumer prices indexes, which means that in the next few years the country will most likely face the second deflation round. Another factor, which is negatively influencing the Japanese yen, is the rate of unemployment, which recently hit the highest level in 4 years. As a result, dollar rose to 99.16 against the yen, the euro reached 131.52, and Australian dollar – 71.88 against the yen.
But information from many other major counties around the world supported the thoughts of many investors that the global recession in a broad view might be coming to an end. For example, manufacturing in China gained during the past month, while exports in South Korea fell much less than were expected.
The equity market is also showing more confidence of investors, indicating improvement in global economies.