Yen’s Rally Raises BOJ Concerns

After the yen touched a 14-year high this week versus the greenback as the Bank of Japan did not discussed the currency fluctuations, finally concerns emerged, as the current levels could be high enough to hurt the Japanese economy and its recovery process.

The Japanese yen, influenced by several factors, touched the highest rate in more than a decade versus the U.S. dollar this week, and finally Japanese Finance Minister Hirohisa Fujii informed that eventual measures will be taken to control the yen’s rate as he may contact U.S. and European central bankers to intervene on currency markets, affecting the yen psychologically and retreating it from the record high it touched a few days ago. Fujii also affirmed that the Group of 7 may articulate solutions to avoid disparities in currency markets, signaling that it is unlikely that the yen will rally much further, making frenetic traders to cool down setting the yen back towards the end of the week in currency markets.

After testing the key-psychological level of 85 per dollar, the yen pared its gains, and its likely that the BOJ will act more aggressively if the nation’s currency continues bullish, according to analysts. The Japanese currency has been gaining specially versus the greenback as the appeal for the U.S. currency has been declining globally during the past months.

USD/JPY traded at 86.79 as of 16:24 GMT after it touched levels as low as 84.95 yesterday.

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