Monthly Archives: August 2009

The Japanese Yen’s gain over the US Dollar has been attributed to month end positioning, as opposed to positive Japanese data. The UK market is closed for a holiday, but the Euro and Sterling continue to drop a bit.

The Japanese election over the weekend, with a change in party power, did not affect the US Dollar’s losses as much as you would think. Instead, month-end factors played a bigger role in the losses. Reports indicated that the opposition DJP won 308 seats in the 480-seat lower house, but that was largely expected and it had already been factored into the market. In any case, implementation of the new party’s agenda may prove to be difficult, since they do not have the 320 seat, two-thirds majority that would enable them to pass bills without support from othr parties. With the majority of the DJP party under 40 years of age, it will be interesting to see what kind of leadership and in what direction Japan will ultimately be pulled. The DJP agenda is to take back power from the bureaucrats and to free Japan from its dependence on exports. With a weak Japanese economy hanging in the ballads, that would be a difficult gesture to conjure up.

Although the Japanese Yen rarely responds to economic data, that may change soon, as the new regime continues to push for change that will affect global investors in Japan, as well as the production of global Japanese companies.