Building on bullish gains in recent days, the JPY continued to increase against most of its currency rivals. The Japanese currency rallied against the EUR and USD, to close at 91.25. This was thanks to the grim economic data coming from the U.S. and Europe. This took almost 150 pips from the EUR, as the European currency closed at 124.55 against the Yen. The other reason for the decline in the EUR was the pressure that Europe faces, as Britain cut her Interest Rates by 0.5% yesterday. This led investors that the European Central Bank (ECB) may do the same in the coming week.
Today, there is little economic news coming out of Japan. However, the Yen may continue to rise against the EUR and USD, as traders continue their pessimism with these 2 currencies. The JPY is likely to move on economic news coming out of Europe and the U.S. It therefore seems that the New Year rally has ended, as the USD and EUR may go back to pre-2009 levels. Consequently, the JPY may record some corrections against its major currency pairs in the coming days. However, the one thing that may prevent this from happening is unexpected negative economic data coming out of the Japanese economy.