With a Bank of Japan policy meeting coming up in October 30, many expect an announcement related to stimulus efforts. As a result, the Japanese yen is heading lower against other majors right now on the speculation that stimulus efforts will weaken the currency.
The Japanese yen is heading lower as Forex traders speculate that the October 30 meeting by Bank of Japan policymakers will result in additional measures to stimulate the Japanese economy. Japanese leaders have made comments about economic stimulus, as well as promised to keep the yen weak.
Not only is the Bank of Japan expected to expand its asset purchase program, but Japan’s cabinet is getting in on the action, and expected to launch its own stimulus effort in the form of aid to small firms through subsidies. These efforts are expected to weaken the Japanese currency, which is what Japanese leaders want anyway, since it gives Japan an edge in trade.
Also helping the situation is the fact that risk appetite seems to be showing up again today. Riskier assets are in demand, as high beta currencies move higher along with global equities.
At 12:51 GMT USD/JPY is up to 80.2190 from the open at 79.8050. EUR/JPY is also higher, at 104.1325, up from the open at 103.5350. GBP/JPY is up to 129.4100 from the open at 127.9250.
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