The Japanese yen declined against most major currencies on Monday. Gains in Asian share prices encouraged some risk-on trades, causing the Japanese yen’s downfall. The currency tumbled down by 0.5% against the euro to 121.56.
The Japanese yen also declined roughly by 0.5% against the Australian and New Zealand dollars. However, analysts stated that the yen could quickly reverse course, given the coronavirus’s uncertainty.
According to Masafumi Yamamoto, the chief currency strategist at Mizuho Securities, when it comes to dollar/yen, recovery expectations often support the greenback. But worries about the coronavirus are capping the upside.
Currently, the forex markets stay focused on other currency pairs, like the Aussie, which is still in a clear uptrend against the greenback due to the jump in copper prices.
Meanwhile, the yuan gained as Chinese share prices skyrocketed to their highest level in five years. The currency jumped to 7.0490 per dollar on Monday in onshore trading, the highest since April 30.
What about the U.S. dollar and European currencies?
The dollar climbed up to 107.68 yen on Monday, after gaining 0.3% last week. However, the currency lowered to 0.9432 against the Swiss franc. Traders were waiting for new data to show the U.S. services sector stopped contracting.
Most market participants are focused on the growing likelihood that major economies will continue to rebound. However, new Covid-19 infections continue surging steadily in the United States. Such a rise discouraged some investors from taking big positions in the market.
Meanwhile, the euro climbed up by 0.36% to $1.1287. It also rose to 90.35 pence against the sterling. The euro moved in a narrow range, as investors waited for economic data from Germany and the eurozone. Traders expect those two to show a sharp rebound in corporate activity and retail sales. That would ease concerns about the economic outlook.
Germany is scheduled to release industrial orders for May. The British pound also moved in a narrow range at $1.2494 so far.