Japanese Yen Sinks on Latest from Shinzo Abe

After gaining some ground, the Japanese yen is dropping against its major counterparts, mainly due to a combination of the latest plan from Prime Minister Shinzo Abe and the idea that the yen was probably overbought recently.

The latest plan by Japanese Prime Minister Shinzo Abe is mulling over an idea to cut corporate taxes. He is trying to consider ways to offset a proposed increase to sales taxes. The news about a corporate tax cut sent Japanese stocks higher, and the yen lower.
Also contributing to yen weakness is the idea that the Asian currency has been overbought recently. With good economic news out of the United States, and with the eurozone moving out of recession territory, the still-sluggish Japanese economy probably can’t support the kind of strength the yen has been showing lately.
Recent developments indicate that things are still in flux for Japan. The Bank of Japan might not have added more stimulus recently, but there are still efforts to jump-start the economy, and those efforts, no matter their shape, are likely to impact the yen.
At 16:50 GMT USD/JPY is up to 98.1600 from the open at 96.9035. EUR/JPY is up to 130.0600 from the open at 128.8850. GBP/JPY is up to 151.7250 from the open at 149.8450.

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