Forex Market: Yen Value Drops As Stocks Continue To Progress

The value of the yen declined gradually on Friday as other forms of currency boosted while reports that United States President George W. Bush would declare ideas to assist sub prime mortgage borrowers later in the day pumped regional stocks.

Traders mentioned that yen selling connected to the start of many new Japanese mutual funds moved the low-yielding currency down a bit as well, making an addition to a string of investment trusts that began this month that are bringing Japanese savers into international assets.

However, traders mentioned that many market players were staying close to the sidelines before an announcement by Federal Reserve Chairman Ben Bernanke on housing and monetary policy was made later on for hints on whether the central bank could slash interest rates in the near future.

The Nikkei share average of Tokyo jumped more than two percent after sources informed Reuters that President Bush plans to outline reforms on Friday which are supposed to assist homeowners who are having hard times with sub prime mortgages.

"The forex market reacted and sold the yen to the news about Bush after other markets like stocks showed strong reaction with a hope," stated Masashi Kurabe, chief dealer of Forex trading at Bank of Tokyo-Mitsubishi UFJ.

U.S. currency increased 0.2% from late Thursday United States trade to 116.15 yen. Not to mention, the United States currency moved as high as 116.38 yen during one instance and remained distant from a fourteen month low of 111.60 yen which had occurred 2 weeks ago.

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Forex Currency Trading - Value of Euro Not Progressing

European currency has not made much progress against yen and the US dollar, and it has bounced back against the sterling. Today, ECB President Jean Claude Trichet mentioned that the ECB was not necessarily committed early to driving up interest rates at its next policy meeting, which is to be held on September sixth of this year. The remarks will increase the possibility that problems in global credit markets will force the ECB to keep its present overnight call rate.

The Euro dropped slightly against the US dollar this morning in NY after jumping to a two-week high of 1.3684. The euro proceeded to move roughly sideways throughout the day, arriving at 1.3651 by three PM Eastern time.

This morning, the National Association of Realtors unveiled its report on current home sales for July of this year, revealing that existing home sales dropped slightly compared to a progressively revised reading for last month.
The report mentioned that current home sales moved down 0.2% to a yearly rate of 5,750,000 units in July from a progressively revised movement of 5,760,000 million units in June. With the decline, current home sales were down 9% from year to year. Unfortunately, this is one of the many common occurrences with forex currency trading.

Currency Trading News - Yen Drops

The Japanese yen dropped against the other majors on last Friday in New York, forking back gains from earlier in the day. The yen saw weakness against all 3 majors shortly after finding highs at around 8 a.m. ET. Traders considered data showing that Japanese corporate bankruptcies increased 22.7% annually in July.

The Japanese currency saw early afternoon slips against the euro and extended its daily low. The yen began to drop sharply at around 11:45 a.m. and has continuing for about forty-five minutes. It traded at 162.24 at 12:30 p.m. ET. This took the yen further away from a 3-month high. Trading took place after the European Central Bank launched a 3-day quick tender at four percent at 4:50 EST to add further liquidity, following up on Thursday's injection of 94.8 billion euros in cash into the system.

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