BoE Report on Inflation Spurrs Yen’s Growth

The Japanese yen began to grow today, after a not very good Asian trading session, when the market participants began to react on the British central bank’s report on inflation and to favor the secure assets and currencies.

The report by the Bank of England released at the press conference today suggests that the gain in the consumer spending may be quite far in time at this moment. It was generally more pessimistic and failed to give traders some clue regarding the normalization of the global financial system. The whole report was summarized by saying: «The economy will eventually heal, but the process may be slow.»

The Japanese yen gained against the euro, the pound and reached the highest value against the U.S. dollar since April 28. The analysts say that the BoE turned out to be more bearish on the markets than the traders have expected. That fact buried many risk-hungry hopes and will probably cause a more prolonged correction of the high-yielding assets, including currencies that used to grow against the yen in carry trade during the previous years.

EUR/JPY fell from 131.43 to 130.78 as of 12:42 GMT today, that’s the third bearish day in a a row for this currency pair. GBP/JPY declined from 147.05 to 145.17, while USD/JPY went down from 96.33 to 95.85, trading not too far away from its 2-month low of 95.61.

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