With attention back on the U.S. economy, investors are turning to riskier assets and exiting safe-haven assets and currency plays, like the Japanese yen exchange traded fund.

The CurrencyShares Japanese Yen Trust (NYSEArca: FXY) was down 0.3% Tuesday. The currency fund gained 1.6% over the past week, following the emerging market-induced sell-off, and rose 2.6% year-to-date. [Amid Turmoil, the Allure of Safe-Haven Currency ETFs]

The yen is down in an “unwinding of risk-off,” Masafumi Takada, a director at BNP Paribas SA, said in a Bloomberg article. “Japanese yen is being traded as a proxy of risk on-off, making dollar-yen swing a bit.”

The Japanese yen weakened 0.3% to 102.86 per U.S. dollar Tuesday after falling 0.7% Monday.

Moreover, traders are anticipating further tapering as the Federal Open Market Committee will make an announcement Wednesday. While tapering would cut aid, the announcement would further lend support to an expanding U.S. economy.

“The market overreacted in the risk-off move last week and some are taking advantage of good levels to increase risk,” Athanasios Vamvakidis, head of Group of 10 currency strategy at Bank of America Merrill Lynch, said in the article. “Also, although everyone expects the Fed to continue tapering this week, they also expect dovish forward guidance, which will be positive for risk.”

The Japanese is currently trading around its so-called Goldilocks’ range of 100-110, reports William Mallard for Reuters, but Fed tapering, which strengthens the U.S. dollar, and continued Bank of Japan easing, which further weakens the yen, could test the limits. [Japanese Yen ETF Weakens on BOJ Policy Bets]

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