Japanese yen showed a little strength earlier today, logging small gains against the euro and the pound. However, things have changed since then, and the yen is weakening again, thanks to Japanese officials’ comments about economic stimulus and a weaker yen.
Earlier, the yen showed strength on the Forex market. However, comments by Seiji Maehara, the Economics Minister, have put a damper on yen strength. Maehara said that the government would take on the stronger yen. Even though he said that the government would consider possibilities for using a strong yen to the benefit of the economy, the reality is that Japan is likely to do as it has always done: Intervene to keep the yen weaker.
Indeed, these comments came after Prime Minister Yoshihiko Noda made it clear that he wants economic stimulus measures that can be quickly implemented. These types of economic stimulus are likely to be of the nature that weakens a currency, sending it lower. The result is a yen that is heading lower against many of its major counterparts, and that is likely to remain weak as the government continues to try to boost the economy.
At 13:16 GMT USD/JPY is down to 78.7200 from the open at 78.8865. EUR/JPY is up to 103.2405 from the open at 102.9830. GBP/JPY is up to 127.1150 from the open at 127.1050.
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