Japanese Yen Drops on BOJ Easing Expectations

The Japanese yen is dropping today, heading lower against its major counterparts as easing expectations dominate the news. With Shinzo Abe set to be the new prime minister in Japan, aggressive easing is expected for the Bank of Japan. That is leading to a lower yen today.

Shinzo Abe, who served as prime minister for less than a year before resigning in 2007, is back in as the Liberal Democratic Party won in the recent general election. Abe has been quite outspoken about aggressive easing majors, and how they should be used to help stimulate the Japanese economy. As a result, many Forex traders expect that the Bank of Japan will be easing quite soon.
Aggressive easing would weaken the Japanese yen against its major counterparts, since there would be more yen in the markets. With easing almost certainly on the horizon, it is not surprising that Forex traders are responding by shorting the Japanese yen.
For now, yen weakness is likely to be the story of the day, and there are expectations that the situation will not change anytime soon.
At 13:33 GMT USD/JPY is up to 85.3625 from the open at at 84.7500. EUR/JPY is up to 112.7130 from the open at 111.7250. GBP/JPY is up to 137.7500 from the open at 136.6650.

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