The Japanese yen pulled itself up from its lowest value in nine months against the U.S. dollar on Friday as market sentiment signaled losses to the currency during recent trading sessions might have been overdone as the national election looms this weekend, Bloomberg reports.
Shinzo Abe from the Liberal Democratic Party has long been forecast to prevail during Sunday's election in the Pacific Rim nation. He has repeatedly called for monetary easing to spur the globe's third-largest economy and he set an inflation target of more than 2 percent.
The past several trading sessions have seen the country's monetary unit impacted by Abe's campaign rhetoric and expectations that the market will be flooded by the currency after the political leader prevails. The monetary unit has dropped to its lowest value since March 21.
But Friday's gains might be attributable to the yen's losses being overdone and happening too rapidly.
"There's a race to cheapen currencies and I don't think the U.S. is going to win," chief investment officer Rick Rieder with BlackRock Fundamental Fixed Income said during a media briefing this past Wednesday, according to Reuters. "Places like Europe and Japan will win the race to cheapen their currencies."
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.