benefiting the yen. In Europe, a report is likely to indicate that producer prices declined at a strong pace, damping demand for the European common currency. Emergent-market currencies like the South African rand, and Commodity-linked currencies like the Australian dollar, posted the sharpest losses versus the yen, as these currencies tend to have a higher volatility due to their riskier profile.
Analysts indicate today’s movement as a correction, and also a pause in the current rally that higher-yielding currencies are imposing versus the yen. A number of traders are selling their positions in emergent-markets to take profits from last week’s rally, but it does not mean that the yen is starting a recovering pattern, the outlook for the Japanese currency still remains very negative.