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Threat of Interventions Continues to Weaken Yen

March 12, 2013 at 6:15 by Vladimir Vyun

1,000 yenThe Japanese yen extended its drop today, falling to the lowest level August 2009 against the US dollar, on signs that policy makers will continue to intervene, attempting to weaken the currency. The yen paused the decline as of now, trimming its losses against the dollar and erasing them completely versus the euro and the pound.

The next Bank of Japan Governor Haruhiko Kuroda signaled that he will pursue more aggressive monetary easing and said that he will “debate policy steps with the monetary policy committee and implement these steps as soon as possible”. He also voiced his opinion that the current easing measures are “not a strong enough commitment to quickly achieve the 2 percent inflation target”. BoJ deputy governor nominee Kikuo Iwata supported such view, saying that decisive policy actions are necessary.

The minutes of last month’s policy meeting showed that the members of the board discussed various measures to increase stimulus, including buying government bonds with longer maturity. All in all, Japanese policy makers look serious about boosting the economy and depreciating the yen and this weighs on the currency.

USD/JPY rose from 96.26 to 96.69 before trading at 96.42 as of 6:15 GMT today. EUR/JPY climbed from 125.57 to 126.02, but returned to the opening level later. GBP/JPY was flat at 143.57 after rallying to 144.11.

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

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