Safe-Haven Demand Bolsters Yen ETF

ETF Trends

The Japanese yen exchange traded fund is looking to test its long-term resistance line, with the currency strengthening to a three-month high, as safe-haven demand fuels gains.

The CurrencyShares Japanese Yen Trust (FXY) was up 0.3% Monday, trading around 0.5% shy of its 200-day moving average. FXY is up 3.6% year-to-date.

The yen appreciated to 101.1 per U.S. dollar in early trading Monday, the strongest since Feb. 5.

The yen is rising due to a “kind of a Monday morning panic,” Peter Gorra, head of foreign-exchange trading at BNP Paribas SA, said in a Bloomberg article. “People read the press over the weekend and they get a little bearish. Treasuries that are supposed to, yield wise, stay flat to trade higher now seem to be putting new momentum to the downside, which is causing a growth scare.”

Specifically, last week, investors grew cautious over growth prospects after readings on retail sales and consumer sentiment were weaker-than-expected, Reuters reports.

“The issues really are more the US economy and the fact equity investors are very hopeful we will see an acceleration in the economy,” Tim Ghriskey, chief investment officer of Solaris Group, said in the article. “We still get very mixed economic signals – one positive data point is in contrast with a negative data point.”

Meanwhile, the benchmark U.S. Treasury yields dipped to a six-month low Thursday, breaking below the 2.5% level. [Safe-Haven ETFs for Turbulent Times]

“U.S. yields may not stabilize until we have consistent improvements in U.S. data, which means that for the time being, the trend in the greenback could still be lower,” Kathy Lien, managing director of FX strategy for BK Asset Management, said in a note, Reuters reports.

The U.S. dollar has been weakening this year, with the PowerShares DB US Dollar Index Bullish Fund (UUP) down 0.5% year-to-date.

CurrencyShares Japanese Yen Trust

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For more information on the yen currency, visit our Japanese yen category.

 

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