Yen weakness continues today, thanks in large part to the latest decision from the Bank of Japan. Also affecting the yen’s performance is the fact that there’s a lot of optimism about global economic recovery right now, and that means that the demand for a safe haven like the yen is low.
The Bank of Japan decided to maintain its plan to add to the money base each year. The current plan is to add between 60 billion and 70 billion yen to the monetary base. It’s not surprising that, in light of this move designed to keep the yen weak, the yen does, in fact, remain weak.
Continued quantitative easing in Japan, in line with the policies of Prime Minister Shinzo Abe, will likely weigh on the yen, especially as signs surrounding an improved economic situation for the world in general reduce the need for a safe haven currency.
For now, the yen is weakening against its major counterparts. In fact, the US dollar is at a five-year high against the Japanese yen right now. With the US economy expanding, and Japan still trying to kickstart its own economy, the difference is significant.
At 13:59 GMT USD/JPY is up to 104.5050 from the open at 104.2235. EUR/JPY is up to 1.3645 from the open at 1.3656. GBP/JPY is up to 170.7220 from the open at 170.6070.
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