The Yen saw an abnormal rally during last week's trading session. Until Thursday the Yen saw a 700 pips gain versus the US Dollar, a 1,600 rally vs. the Euro and a 1,400 pips rise against the Pound. However, by Friday the trend was reversed, and the Yen lost about half of its gains.
The Yen's rally was a direct result to the Euro-Zone's crisis. It has proven over and over again that when global economic stability is threatened, investors tend to massively purchase the Yen. The Yen is still considered to be the safest investment among the major currencies, and thus every economic crisis, whether its origins are in the U.S. or the Euro-Zone is likely to boost the Yen.
For the very same reason, the recent rescue package which was offered to Greece may have signaled the ending of the Greek debt crisis. The Yen has promptly weakened and in fact has lost half of its gains within merely two trading days. It is quite remarkable to observe how well the Yen reflects investors' mood, and how easily it fluctuates accordingly.
As for the following week, traders should continue following the news updates from the Euro-Zone regarding the Greek fiscal crisis. Traders should take under consideration that until now, every positive data had a negative impact on the Yen and vice versa. In addition, traders should follow the leading Japanese economic publications such as the Current Account and the M2 Money Stock, as they are likely to have a large impact on the Yen as well.