Yen in the dumps as carry trades flower

Yen in the dumps as carry trades flower

 

LONDON (Reuters) - The Japanese yen stayed on its feet against higher-yielding currencies, such as the Australian dollar, on Friday after good statements by major politicians confirmed market expectations last week that interest rates will grow very slowly.
"In general, the market with a negative attitude towards the US dollar is the last comment from Yellen and others, which show that interest rates will grow very mildly, and at the moment it supports high-yielding currencies," said Viraj Patel FX ING Bank strategist-analyst. London,
Australians and pounds sterling were one of the most successful currencies, especially against the Japanese yen.
Against the yen, the Australian dollar rose 0.23 percent, while the pound rose 0.31 percent, while the relatively optimistic outlook from Fitch Ratings in China also supported investor sentiment.
Significant market indices of asset volatility, such as the valuation of the options volatility of Merrill Lynch <.MERMOVE1M> and VIX (VIX), declined on Friday, which became an incentive for trading.
The recent advance of the US currency, especially against the yen, stopped by the end of this week after Federal Reserve Chairman Janet Yellen curbed some of the expectations associated with a tightening of monetary policy supporting the dollar.
This opinion was further strengthened by other American politicians, such as the president of the Federal Reserve Bank of Dallas Robert Kaplan on Thursday, although analysts feared for the dollar's feet below inflationary data from the US.
Signs of higher inflation in the US may strengthen the view that the Fed will raise interest rates sooner than later, which will increase the yield of Treasury bonds and the dollar.
Nevertheless, according to the forecast, the consumer price index (CPI) in June will grow by only 1.7% compared to the same period last year after a similar increase in May. It is expected that the base consumer price index in monthly terms will grow by 0.2 percent after an increase of 0.1 percent in the previous month.
The euro slightly changed at $ 1,1407, unable to find much recovery, even when the yield of bonds for 10 years in Germany rose above the 0.50 percent threshold for one night. This was followed by a report that the European Central Bank is likely to report in September that its asset procurement program will gradually decline next year.