USD decreased against the JPY in early trade this week, as result of declining propensity of investors to take risk. The purchases of Japanese currency strengthened the JPY and USD slid to lowest value since May 3. The growth of the JPY, around levels 105 is not accepted enthusiastically from Tokyo, where yen continues to be a concern for central bankers. The currency-seekers, which finds support in moments of uncertainty again took up creating problems for the Bank of Japan, which is trying to save the country from deflation and low growth.
The upcoming referendum in Britain on June 23 led to losses for the GBP and the EUR at the expense of the JPY. The dangerous membership in Britain in the European Union (EU) fell GBP to 150.08 JPY, as the single European currency recorded a drop to 118,996 against the Japanese bargaining unit. The fall of the pound is led by raising supporters to leave the country by the Community as a sterling record another portion lows against major rivals. The EUR was also shaken after the risks to EU unity intensified, leading to losses for the single currency to 1.12317 against the USD during the Asian session.
The rising yen and vote in Britain led to losses in the Nikkei by 3.34%, as Asian indicators remained in the red. Moreover disappointing data from China also tipped the scales at auctions by Hang Seng erased 2.76% of its value. Sentiment was negative and Friday on both sides of the ocean, where Germany’s DAX index lost 2.52%, while US Dow Jones Industrial Average and S&P 500 slumped respectively 0.67% and 0.92%. In addition to unknown factors about the referendum in the UK, the investors are waiting for the meetings of the US Federal Reserve (Fed) and Bank of Japan later this week. After weak data on non-agricultural employment almost wiped out the likelihood of an increase in interest rates in the economy number one, market participants expect President Janet Yellen to shed light about the possibility of action later this summer. On the other hand, central bankers of Japan found a day later, the new portion appreciation of the yen would make an impact on the intentions of the institution.
Elevated levels of caution led to losses for oil, which fell below 50 USD per barrel. The US light crude slipped 1.5% while Brent by 1.29% depreciated respectively to 48.21 and 49.81 USD per barrel,. Existing concerns about growth in China and deteriorating confidence in the stability of Japan could reduce consumption of raw material from two leading Asian economies. However, it is expected that China will underreport their consumption by between 730,000 and 760,000 barrels a day this year, which would support the price of “black gold”. However, if these values be lower, this could have a negative effect on quotations of oil.