The Yen strengthened against most of the major currencies during last week's trading session. The Yen marked a 200 pips gain vs. the Dollar, and the USD/JPY pair is now trading near the 89.30 level. The Yen strengthened against the Euro as well.

The main reason for the Yen's rise last week was the disappointing data from the Euro-Zone and especially the U.S. economy. In the U.S. the housing sector, which was the catalyst for the recent global crisis, provided rather disturbing figures. This created concerns that the U.S. recovery might take longer than expected, and as a result will damage global recovery as well. The Euro-Zone has provided various disappointing economic publications as well. All this has reduces risk-appetite in the market, and turned investors to look for safer assets. The Yen is considered to be a relatively safe investment, and thus when risk aversion increases, investors tend to put their faith in the Yen. As a result the Yen soared against most of its counterparts.

Looking ahead to this week, a batch of data is expected from the Japanese economy. The most significant publication looks to be the Tankan Manufacturing Index, which is expected on Wednesday. This is a survey of about 1,200 large manufacturers, which are asked to rate the relative level of general business conditions. Analysts have forecasted that the end result will be negative. If the actual result will indeed be negative, the Yen may erase some of its gains from last week.