The Yen rallied yesterday against most of the major currencies. The Yen gained about 70 pips against the Dollar and about 120 pips against the Euro and the Pound, correcting some of last week's losses.

The Yen strengthened yesterday on concerns that the Euro-Zone's deficit may worsen. There are speculations that the stress tests that are made to check the European banking system's condition will lack to deliver all the required data, and as a result will fail to assure investors. This has reduced risk appetite in the market, and has supported the Yen, which is considered to be a relatively safe asset. It currently seems that for as long that the Euro-Zone will fail to deliver recovering signals, and for as long that the U.S. economy will provide negative data, the Yen might appreciate further.

Looking ahead to today, the Yen will be absent from the economic calendar. Traders are advised to follow Japanese equity markets as they are highly correlated with Yen movements. Traders should also follow the main publications from the U.S. and the Euro-Zone as negative data has potential to boost the Yen further.