Japan, War Weigh on Currency Market

Posted March 23, 2011

Numerous factors move currency market in a week of up and down trading. Japan and threat of war weigh heavily.



During the Monday currency trading session, the Japanese yen continued to be one of the biggest currency movers for the week. The US dollar ended the Monday trading session lower against the yen, especially after losing its earlier in the day gains. All of this stems from the Bank of Japan taking steps to roll out a fresh monetary stimulus to help provide moderation for the market after the impact of the country's earthquake and tsunami.
During the Monday trading session, the US dollar moved from Y 81.88 at the end of the Friday session to Y 81.68 by the end of the Monday trading session. The Dollar Index moved the currency from 76.746 to 76.330 by the end of the Monday session in New York.
During the currency trading session on Tuesday, the Japanese continued to move up against most of its major currency rivals. This came as many worried about the unstable conditions at the country's nuclear power plants following damage after the tsunami and earthquake the previous week. That lead to the Tokyo stock market and global equities markets falling tremendously. For the day, the US dollar moved from Y 81.68 to Y 80.73 by the end of the trading day. The US dollar index moved the current to 76.339 for the day.
During the Wednesday currency trading session, the Japanese yen continued to be the dominate role player. It moved to a new high against the US dollar. The US dollar fell below the Y 80 mark, all stemming from concerns about the Japanese nuclear situation. Both the US and the European stock markets continued to struggle and that sent traders to the perceived safety of the yen. For the day, the US dollar moved to Y 79.80, but fell as low as Y 79.73 during the day's trading. The US dollar index moved the US dollar from 76.339 in late day trading in North America to 76.656 by the end of the trading day on Wednesday. The euro slipped to US $1.3892 during the day and the UK pound moved to US $1.6018 by the end of the trading session.
The trading session on Thursday marked a slight switch in the movement. The Japanese yen pulled back from the highs that it hit the day before, against the US dollar. This was brought on by the traders trying to gauge what would occur in a discussion being held by the Group of Seven that would occur later in the day. Part of the conversation in those talks was likely to be measures that would help to blunt the yen's continuous rise after the nuclear crisis.
The US dollar moved to Y 79.08 during the day's trading, but during early in the day trading, in Asian the currency traded as low as Y 76.32, which is the lowest the currency has traded since April of 1995. The US dollar index showed the US dollar moving to 75.992 overall.
On the Friday books, the Japanese yen fell again during the trading session against the US dollar, after climbing to such highs on Wednesday. It fell by the most it has fallen since September against the currency. This came after the Group of Seven Nations met and agreed to take financial steps to curb the yen's currency rise since the earthquake occurred. This is the first time since 2000 that the world's financial powers came together for a coordinated intervention. The US dollar moved to Y 80.92 for the day. The US dollar index moved the currency to 75.654 by the end of trading.