The Japanese yen fell today on speculations that the Federal Reserve may trim its stimulating program, while it is not likely that the Bank of Japan will reduce its asset purchases in the foreseeable future.
Last week’s comments of Fed Chairman Ben Bernanke hushed talks about a reduction of quantitative easing, but did not stop them altogether. Bernanke testifies this week too and market participants wait for his comments impatiently, hoping to hear more hints about the future actions of the US central bank. Today’s data certainly did not support the case for smaller stimulus.
The path of Japan’s central bank is much clearer. It is true that policy makers halted the expansion of the asset purchase program, but it is very likely that the policy will stay accommodative for the time being.
USD/JPY rose from 99.33 to 100.04 as of 23:44 GMT today. EUR/JPY edged up from 129.95 to 130.61, bouncing from the daily low of 129.35, and GBP/JPY went up from 150.12 to 150.99.
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