Currency,Bank and Forex News

The yen rose to two – week highs on the news that Japan has exited the recession. Demand for the yen as a safe haven was boosted by US regulators closing five lenders down. Analysts are seeing a trend whereby the foreign exchange markets are following the movement of stocks.

According to them, investors are heading for the yen when stocks go down. Indeed, the currency gained against the Euro, the US dollar, the Australian dollar and the South Korean Won as stocks on the MSCI World Index slumped.

Economists had expected the Japanese economy to grow by more than it actually did – GDP grew to an annualized 3.7 per cent while it had been hoped the number would be closer to 3.9 per cent.

The recovery for Japan is good news, although it has been met with caution by the country’s main market analysts.

They say that despite the second quarter results, consumer spending within Japan is still low thanks to still-high unemployment rates and low pay. This means the recovery should be viewed with caution.