The USD/JPY pair dropped last week after the US dollar lost its momentum against other majors, yet with the return of the risk aversion on Friday with downgrade fears for the euro area the yen again held its gains.
The current market sentiment is focusing on the EU debt crisis developments, and whether the economic fundamentals from major economies come strong or pessimistic.
Thus, the latest developments regarding the EU debt crisis are forcing us to predict a continuation of the risk aversion scenario in the financial market, which means more demand for the yen and the dollar against other major currencies, and in contrast more support for the yen against the greenback.
On Monday at 23:50 GMT (Sunday), the Japanese economy will issue the Machine Orders for November, where the previous reading was -6.9% and expected to come at 5.1%, while the annual Machine Orders had a prior reading of 1.5% and expected at 3.8%.
Originally posted here
