Japanese yen is weaker today, dropping against its major counterparts as domestic news weighs on performance. Additionally, USD/JPY is extending gains on the latest news out of the United States.
Japanese yen is heading lower today against its major counterparts as weakness shows through. Part of the difficulty is the aggressive easing being practiced by the Bank of Japan at the behest of Prime Minister Shinzo Abe. However, other factors are also playing a role.
The latest report on funds held by Japanese companies shows that stockpiles of cash have hit record levels, and that many companies are investing that money overseas. A key point of Abe’s plan is to increase investment within Japan and boost wages to help the economy. That’s going to be difficult if companies are hoarding cash and investing overseas. As a result, Japan’s economy could run into serious problems down the road.
In the United States, the prospect that quantitative easing could be tapered by the end of this year, if the economy keeps improving, is boosting USD/JPY.
At 14:01 GMT USD/JPY is up to 97.7950 from the open at 96.4465. EUR/JPY is also higher, moving up to 129.0555 from the open at 128.2250. GBP/JPY is gaining ground as well, moving up to 151.3850 from the open at 149.3400.
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