Good Times For The Yen?
Sometimes all we hope for in the currency markets is a rising currency. There could be many reasons for this, but undoubtedly one of the strongest is the fact that some currencies have had a bad time of late. Just look at the British pound for example – a low value there might be helping exports to other countries, but it would still be good to see it with a higher value.
But the Japanese yen, it would appear, has a different problem – the exact opposite of the British pound. It is currently very strong indeed and that has meant that exports have suffered. If you think about it this makes perfect sense. If the value of the Japanese yen goes up, then the cost of exporting goods from Japan will also go up. And needless to say, in these times of recession and the consequences that stem from it, we are all looking for the cheapest sources of goods – not the most expensive.
The Japanese yen has been particularly strong against the US dollar. But because of the value of the yen we’ll take a look at this from the point of view of the US dollar itself. Even through the first two weeks of September there has been a marked change in what a US dollar can buy with regard to the yen. That means you need to look at the figures on the currency converter very closely indeed if you want to understand the changes that have taken place.
At the beginning of the month, one US dollar would have got you a total of 93.0976 Japanese yen. The following day we saw a marked change in that figure, as the yen started increasing its strength. By the end of the day we were looking at a changed figure of 92.5668. That was a difference of 0.5308 already, but there was a lot more to come with regard to this. Remember what we said about the strong yen and how it was causing problems for Japanese businesses and exporting? Bear that in mind as we carry on through the recent exchange rates to see what happened next.
The 3rd September came and went, and with it came another change in the rates. The US dollar could only muster up 92.4101 Japanese yen this time, so once again the onus was on the yen to grab a better exchange rate. How far could it take this pattern forwards?
Well it seemed as if it stuttered on the very next day, as the closing rate for the 4th was 92.8691. Suddenly the US dollar had gained the advantage – but the question was how long it would last for. That figure marked the end of that week as well, so it gave us some sobering thoughts to hang onto for the coming weekend.
Then we headed into the second week of September. And once again it was the US dollar that had the advantage, as it claimed a closing rate of 93.0425. That added on a total of 0.1734 since the previous Friday, which gave pause for thought as we wondered which currency was now in charge. Remember we were talking about the strength of the Japanese yen here, which has been reported in the online version of the Wall Street Journal - among other places.
But by Tuesday evening things had swung back in favor of the Japanese yen again. A figure of 92.2890 yen to the US dollar was recorded for the end of the day, marking a swing back by 0.7535 in total over what was in effect just twenty four hours worth of trading.
The US dollar tried pulling things back a little the following day, and managed to grab a figure of 92.3633. But the next two days belonged to the Japanese yen, with a closing rate of 92.0728 on the first day and a much lower 90.8729 on the next. That made a difference of 1.1999 in a single day, and it showed how powerful the yen could be.
So it would seem the Japanese yen is indeed going through a purple patch at the moment. And when you consider that the US dollar is often considered to be one of the strongest and most resilient currencies of the lot, you can see how much it means for the Japanese yen to be in control of the US dollar in such a way.
It makes it worth watching for the future, doesn’t it?
