The yen has lost value again today (May 28th), with analysts blaming the drop in the currency on the volatility of the Nikkei index.
Although the Nikkei is up by around 50 per cent on the start of the year, it has fallen by ten per cent in the last week, falling away from a series of new five-and-a-half year highs.
Koichi Takamatsu, a manager of forex at Nomura Securities, told Reuters that he expects the yen to take the lead from the Nikkei in the coming days and weeks.
The dollar rose by one per cent to 101.95 yen, which is up more than a full yen from two-week low of 100.66 hit on Friday.
It has also been able to remain above key technical support levels – which includes 21-day moving average – at 100.80 yen.
Earlier in the month, the yen slipped to a new five-year low against the dollar, with some analysts claiming this is part of prime minister Shinzo Abe's plans for the Japanese economy.
Learn about the Asian markets and CFD trading at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.