Japanese yen is retaining many of the gains it made earlier this week following a Bank of Japan announcement that indicates the asset buying program is likely to remain steady, rather than expand. With quantitative in place for European currencies, Japan has the upper hand for now.
Japanese yen continues to gain today, thanks in large part to an announcement from the Bank of Japan earlier this week. Many Forex traders had expected the BOJ to consider expanding its asset purchase program, but it didn’t. Indeed, BOJ Governor Haruhiko Kuroda indicated that, even though the two percent inflation target they are aiming for hasn’t been hit, Japan has avoided a slowdown in inflation. Additionally, Kuroda expects wages to pick up, and that means that Japan’s asset buying probably won’t increase any time soon.
With the BOJ publicly expressing that it won’t be easing again in the near future, the yen has seen some strength. However, that strength could be short-lived. There are expectations of investor outflow from Japan, and that means that the yen could run into weakness again. Additionally, more quantitative easing might be on the table for the future, even though the BOJ is holding steady for now.
At 12:49 GMT USD/JPY is down to 120.3940 from the open at 120.5770. EUR/JPY is down to 127.3710 from the open at 128.5340. GBP/JPY is down to 175.8680 from the open at 177.4050.
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