Forex: USD/JPY range bound, trading 89.48

on December 16 2009 12:26 AM

FXstreet.com (London) - The Japanese Yen traded largely range bound during the Asian session, trading in a 20 point range between 84.43 and 84.63. USD/JPY dropped off late during the session and currently trades at 89.48/52.

As a safehaven currency the Yen is borrowed (due to Japans near zero borrowing rate) to fund the purchase of higher yielding currencies. This trade is known as the carry trade, the trade carrys a degree of risk if rates change

and the carry trade is more popular in times of risk appetite. The carry trade will all-things-being-equal weaken the Yen.

Support in the case of breakout can be found at 89.30 and after this 88.80 according to this technical report.On the upside primary resistance can be found at 89.70.

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