The Japanese yen has succumbed to concerns about the expected intervention from the Bank of Japan, falling against other most-traded currencies (though rising against the US dollar) after fear came off the Forex market.
It is not a surprise that the yen retreated as traders have less fear about Cyprus. They do not feel need for the safety of the currency in such conditions. And the pledge of BoJ Governor Haruhiko Kuroda to reach the 2 percent inflation target reminded them about the plans for an aggressive intervention.
It will not be easy to achieve that target as for now deflation persists. The national core Consumer Price Index fell 0.3 percent in February from a year ago, while the Tokyo core CPI dropped 0.5 percent. Other reports were not good either. The unemployment rate unexpectedly ticked up by 0.1 percentage point to 4.3 percent last month and industrial production contracted 0.1 percent, while it was expected to expand as much as 2.6 percent.
USD/JPY fell from 94.43 to 94.08 yesterday and remained at this level as of 2:55 GMT today. EUR/JPY erased yesterday loss and traded near the opening level of 120.64, while GBP/JPY advanced from 142.94 to 143.04.
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