Dollar yen weighed by Nikkei slump
The Nikkei’s slump has affected the dollar-yen.
The dollar-yen has been weighed today (May 30th) by the major dip on the Nikkei, which fell by more than five per cent.
Although the Nikkei remains 38 per cent up on the start of the year, it has fallen away by more than ten per cent on the five-and-a-half year highs that were recorded less than two weeks ago.
According to a report by Reuters, the greenback last bought 100.80 yen after hitting 100.56, which is its lowest since May 10th.
Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo, said: "It may seem illogical (for the forex market to follow the Nikkei), but a weaker yen led to optimism for stocks before, so right now the Nikkei's retreat has initiated a fall in the dollar-yen too."
A trader at a major Japanese bank stated he is guessing the trust banks need to buy dollars right now and this is having an impact on the health of the yen.
This comes shortly after an executive at a research company who chose to remain anonymous stated the downward pressure on the dollar-yen has already finished.
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