The Japanese Yen strengthened against most of its major counterparts yesterday, continuing to prove that for the time being this is the solid currency that traders can rely on to provide them with steady profits. The Yen extended gains versus the Dollar on Tuesday, to trade at about 89.40 amid a broad sell-off in the USD. The JPY also saw bullishness against the EUR and closed at 130.60.
The yen gained against the Dollar after Japanese Finance Minister Hirohisa Fujii said that he told officials from the Group of Seven (G7) nations in Istanbul last weekend that governments shouldn't pursue policies that seek to devalue their currencies.
Further strengthening could be seen in the Yen if other nations begin to raise interest rates in order to ward off inflation. This could potentially wreak havoc on the Japanese economy by making Japanese exports relatively more expensive compared to their foreign counterparts. The yen has gained 14% against the Dollar in the past year, hurting earnings for export-dependent Japanese companies.