Japanese Yen Rises on Funds Repatriation Speculations

The Japanese yen grows against the U.S. dollar today after yesterday’s correction on USD/JPY pair, as the traders are speculating on the possible funds repatriation performed by the Japanese exporting companies.
The Bank of Japan left the reference interest rate unchanged at 0.1 percent. The institution also released a statement, showing that it may stop buying domestic corporate debt by the end of the year, showing a confidence in a stronger economy. The yen rose against all major currencies today because the policy of buying out the corporate debt is hurting the demand for yen.
The Japanese exporters sell their goods and services abroad for the foreign currency (the most popular of which is the U.S. dollar). They have to repatriate their foreign earnings by converting them to Japanese yen. The majority of the companies weren’t eager to convert when USD/JPY was below 90. As the rate grew to about 92 during last two weeks, the exporters began the conversion process.
The currency analysts believe that the present upward trend on the yen can’t last too long as the repatriation may end once the 90 dollar per yen level is broken again. There is also a danger of the currency intervention from the Bank of Japan at these levels. Such intervention, combined with the global economical uprise may spur another long-term yen-based carry trade.
USD/JPY declined from 91.51 to 90.83 as of 11:10 GMT today. EUR/JPY went down from 135.79 to 134.90, while GBP/JPY currency pair fell from 151.54 to 150.32 today.

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