Japanese yen is heading lower today, dropping against other majors as rumors swirl regarding the possibility of further economic stimulus. The idea that more easing for the yen could be coming is weakening the currency against the dollar and the euro.
Kiyohiko Nishimura, a deputy governor at the Bank of Japan, spoke recently, insisting that the Japanese economy needs more help to recover. He also cited global economic uncertainties that should prompt Japanese policymakers to take action. Nishimura’s comments, coming just nine days before the next Bank of Japan policy meeting.
The tenor of Nishimura’s comments are leading many to believe that the BOJ will announce more quantitative easing — and perhaps even intervene directly in the currency market to keep the yen weak. Japanese leaders prefer a weak yen to a strong one, since a weaker yen leads to an edge when it comes to exports. A weaker currency can help economic growth, and that is what the BOJ is looking for right now.
It looks as though the BOJ is ready to take action, and Forex traders are rushing to re-position, selling the yen and getting ready for another drop, with the dollar and the pound especially gaining against the Japanese currency.
At 14:23 GMT, USD/JPY is up to 81.3035 from the open at 80.8430. EUR/JPY is also higher at 106.4250, up from the open at 106.1000. GBP/JPY is up to 130.0790 from the open at 128.7450.
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