Japanese yen is gaining against majors today, showing some strength as concerns about the Fed tapering program’s timing cause uncertainty and as Forex traders look ahead to the sales tax hike expected in Japan.
Right now, there are expectations of a sales tax hike in Japan, and it’s one of the signs that Prime Minister Shinzo Abe is truly ready to go through with the reforms he promised. Japan has experienced economic weakness for almost two decades, and many are looking to Abe to lead them out of the situation with his aggressive plans.
For now, that is pushing the yen higher against its major counterparts. Yen is gaining ground against the US dollar, UK pound, and the euro. Even though there is some degree of risk appetite in the FX markets today, the yen is still seeing some strength.
This strength isn’t necessarily positive for Japan, however. The stronger yen is weighing on Japanese stocks, sending the Nikkei lower as the yen affects exporters, especially car companies. The Japanese government will be watching the yen’s performance, and it has shown in the past that it is willing to intervene to keep the yen weak.
At 13:08 GMT USD/JPY is down to 98.3735 from the open at 98.5665. EUR/JPY is down to 131.6600 from the open at 131.9350. GBP/JPY is down to 153.3760 from the open at 153.4250.
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