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The USD/JPY pair declined as the yen rose against the dollar to reach its highest level in two weeks to trade around 82.85 levels. The pair remains under pressure amid risk aversion and jitters haunting the market over the outlook for global growth. On the other hand, the American dollar found some support against the euro and sterling as markets involved into some profit taking ahead of the Easter holidays.
The unwinding of carry trades is taking place in the FOREX markets now and is driving the Japanese currency to gain momentum against other majors, as the JPY remains the safe heaven currency for investors.
The new 7.1 quakethat hit Japan last week caused power outages in Fukushima nuclear reactors, and was followed by another 5.8 quake that hit the north of Japan, which increased demand for the Japanese yen, as concerns regarding Japan’s nuclear crisis is back to dominate investors’ decisions.
The Japanese economy will start Tuesday at 05:00 GMT with the release of consumer confidence for March, after the previous 40.7 and consumer confidence for households after the previous 40.6. The sentiment is likely to have dropped just the full impact of the earthquake might not be fully scaled depending on the timing of the survey which will continue to pressure confidence lower over the coming period and further strain the status of the Japanese economy.
At 12:30 GMT, U.S. economy will release building permits for March, and expected to come at 540 thousand compare with the previous of 517 thousand. The housing starts for March is expected to have increase to 520 thousand following 479 thousand which will support ease risk aversion on the data and likely support the dollar over the Japanese yen.Â
Originally posted here
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