The Japanese yen fluctuated today, staying nearly flat at present, as Forex market participants were unsure whether the Bank of Japan would intervene to trim yen’s gains.
The crisis in Europe is hurting Japan’s economies in several ways. First, it weakened demand for the nation’s exports from European countries. Second, the crisis boosted demand for the safety of the yen, helping the currency to rebound from the March lows. Analysts say that the BoJ is likely to intervene as the impact of the previous easing measures is waning. On the other hand, central bank’s Governor Masaaki Shirakawa said that monetary policy has limited ability to support an economy. The statement made traders wonder: is the BoJ really keen to intervene?
Another factor that is adding to uncertainty is today’s monetary meeting of the US Federal Reserve. Speculators and market analysts will look into the policy statement after the meeting for signs of future quantitative easing. The members of the Federal Open Market Committee previously were divided in their opinion whether the US economy needs additional stimulus, making it uncertain whether QE3 would happen.
USD/JPY traded at about 81.38 as of 15:09 GMT today, following the advance to 81.56 and the fall to 81.07, while the opening price was 81.30. EUR/JPY was near it opening level of 107.29, while intraday high was 107.65 and the low was 107.12. GBP/JPY stayed flat at 131.23.
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