The Japanese yen rallied today as traders were cautious due to the prospects for monetary tightening from the Federal Reserve but not willing to buy the US dollar.
Fed members continued to talk about the possibility of an interest rate hike soon, perhaps even in June. Yet this did not make traders buy the dollar. It looks like they were purchasing the yen instead.
The danger remains for the yen that the Bank of Japan will introduce additional monetary stimulus in order to weaken the currency. Experts thought that members of the Group of Seven may criticize Japan’s participation in what some consider currency wars. The G7 meeting has started today, though at the present time there is no news about issues raised during the gathering.
USD/JPY dropped from 110.18 to 109.75 as of 21:11 GMT today, reaching the low of 109.41 intraday. EUR/JPY traded near its opening level of 122.91 following the drop to the low of 122.25. GBP/JPY declined from 161.93 to 160.95.
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