Yen Suffers Weakness Across Board as Investors Grow Risk Appetite

The Japanese yen fell to a new monthly low against the British pound in the early European session on Thursday, as the GBP/JPY surged amid a reinvigorated risk appetite in investors.

The investor outlook comes amid improved sentiment in the market as governments hold off on implementing new lockdown restrictions, despite the rising spread of the Omicron variant. Recent data from Reuters show that global COVID-19 cases hit an all-time high over the past seven days.

Commenting on the development, senior market analyst for the Asia Pacific at Oanda, Jeffery Halley, noted that:

“Markets continue to price in finishing Omicron fears thanks to low hospitalizations. That has encouraged investors out of defensive positioning and back into the global recovery trade.”

Japanese Yen Weakness Due to Offshore Migration of Funds: Oanda Analyst

The JPY also fell dramatically against the dollar, as it neared last month’s high at 115.52, a five-year high. The Oanda analyst also noted that the yen’s weakness emanates from Japanese investors shipping funds offshore.

Meanwhile, the GBP touched a record high of 1.3505 earlier today against the greenback, as it records its highest point in six weeks. On the other side of the globe, the riskier Australian dollar climbed higher to 0.7272 yesterday but traded on a sideways pattern against the GBP around 1.8560.

The flow from safe-haven assets like the yen to riskier assets can be seen in the spike in the S&P 500 and the Dow Jones Industrial Average, as both indexes closed at new record highs yesterday.