Japanese yen is mostly lower today, following an earlier rally. Comments from a government official sent the yen a little higher against its major counterparts, but now the yen is settling down into weaker territory as the fundamentals are considered.
Economy Minister Akira Amari made comments earlier indicating that he thinks that the yen weakened too quickly. Even though the Japanese government and the Bank of Japan mean for the yen to weaken over the next two years in the name of economic stimulus, the rapid weakness experienced by the yen took some by surprise. With Amari’s remarks, the yen saw a brief flash of strength.
Much of that strength is gone now, though. Thanks to speculation that the US dollar will see more strength on the reduction in quantitative easing (Forex traders are waiting for Ben Bernanke‘s testimony tomorrow), there are now predictions that USD/JPY could hit 105. Only the pound remains weaker against the yen right now; sterling is weighed down by the latest inflation data.
With a quantitative easing plan in place, and the Bank of Japan working to increase the monetary base, it is little surprise that the yen is set for long-term weakness.
At 16:03 GMT USD/JPY is up to 102.7300 from the open at 102.2650. EUR/JPY is up to 132.2110 from the open at 131.7750. GBP/JPY is down to 155.5330 from the open at 156.0250.
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