Japanese yen remains mostly weaker against other currencies today. Japan’s government continues to pressure the Bank of Japan to do what it can to encourage an economic recovery. However, with the yen mostly weaker, especially against the US dollar, the BOJ is unlikely to make any startling policy changes anytime soon.
Last month, the BOJ introduced surprise easing with the intent to keep the yen weaker and promote a favorable export situation. Additionally, Japanese officials weren’t afraid to intervene in the currency markets during 2011 in order to weaken the yen.
However, efforts to keep the yen weak in order to help economic recovery haven’t been entirely successful. One of the big issues is that higher fuel prices have been a drag on the Japanese economy. Even though the yen has weakened, economic stimulus has been slow because fuel prices have been so high lately. Oil prices may be a bit lower right now, but higher prices have already done their damage.
For now, the yen is likely to remain relatively weak against the US dollar. Good economic news in the United States should support the greenback against the yen. However, yen is higher against the euro, as jitters about Greece and the eurozone emerge in spite of a Greek debt swap deal being reached.
At 15:34 GMT USD/JPY is higher at 82.4650, up from the open at 81.5535. EUR/JPY is lower at 108.1110, down from the open at 108.2560.
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