The Japanese yen (JPY) was one of the currencies that depreciated the most this year. Even in the late December trading, the JPY is at its yearly lows, especially against the dollar.
This is somehow surprising, considering the Fed’s tapering, but stocks outperformed during the year, justifying the weakness in the JPY pairs.
The yen is viewed as a safe-haven currency that appreciates in times of uncertainty and depreciates when the stock market is bullish. But recently, the JPY pairs’ rally has been stalling. For instance, the USD/JPY pair had difficulty finding buyers above 115, while the EUR/JPY found sellers above 133.
Is the change in leadership good for the JPY? The newly appointed Prime Minister Fumio Kishida has big spending plans to stimulate Japanese economic growth, which might be key to how the JPY will perform in 2022. ....More info: blog FXOpen
