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Yen Sinks as Bank of Japan Expands Asset Purchases

February 14, 2012 at 21:54 by Vladimir Vyun

Japanese yen symbolThe Japanese yen slumped to the lowest level since November against the US dollar and also fell against some other majors after the Bank of Japan unexpectedly increased its asset purchase program.

The Bank of Japan unexpectedly expanded its asset purchase program by 10 trillion yen and set its inflation target to 1 percent. That’s just another attempt by the central bank to counter a deflation and support the nation’s economy.

Earlier the yen was rising as European finance ministers canceled their meeting in Brussels tomorrow amid doubts that Greece would fulfill its promises. The finance chiefs will hold a teleconference instead. Retail sales in the United States rose less than predicted, adding to the appeal of the yen. The current global macroeconomic environment is actually very supportive to the Japanese currency, but the BoJ spoiled the day for the yen. The currency may still resume its gains if demand for safety would outweigh the stimulating measures of Japan’s central bank.

USD/JPY surged from 77.57 to 78.43 as of 21:54 GMT today and touched 78.55 — the highest price since November 1. EUR/JPY climbed from 102.27 to 102.99 and GBP/JPY advanced from 122.29 to 123.08.

If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

3 Responses to “Yen Sinks as Bank of Japan Expands Asset Purchases”

  1. Sumit

    I am closely watching YEN-USD. When ever there is a intervention from the BOJ. Yen depreciated for a week and then again it rises. Is the same stuff expected again.
    Whats is the expectation between INR and USD?
    Can you please help me.


  2. Andrei Moraru

    The yen failed to renew its highs before this intervention, so it may probably turn to a downtrend. But it has many strong support levels ahead.
    INR remains in great dependence on the actions of the Indian authorities.

  3. Thomas

    any expert can give me some suggestion should i keep the low rate of yen? but is it possible to rise it back during march or will decrease keep on decreasing? thanks.

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