Though the Dollar has recovered to some extent, earlier in today’s trading session, the Japanese Yen struck a new 18-month peak, adding to last week’s gain. Investors have apparently come to the realization that neither the government of Japan nor the Bank of Japan has the ability to completely stop the Yen’s appreciation. The Japanese Finance Minister said over the weekend that the strength of the Japanese currency was “extremely concerning” to officials, yet despite that, the Bank of Japan failed to announce any new easing measures. According to traders, that means that an upward bias is the more likely direction for the Yen.

As reported at 10:04 am (BST) in London, the USD/JPY was trading at 106.4655, a gain of 0.14%. Earlier, the pair had hit a session trough of 106.1750 Yen, and a high of 106.7405 Yen. The EUR/JPY was up at 122.3250 Yen, a gain of 0.38% in volatile trading.

Global Concerns Driving Safe Haven Demand

One currency strategist in Frankfurt said that the verbal intervention could temporarily stem the Yen’s rise however the decision by the policy makers not to take action essentially caused the latest strengthening. The Yen remains the investors’ choice among safe haven currencies and it is testament to that uncertainty when one considers the depth of that concern as regards the global economy. Last week, the Yen gained nearly 5% versus the greenback, the largest recorded gain in nearly eight years.