The Japanese yen started today’s session by gaining some ground against major currencies before losing most of its gains during the American trading session. The strengthening of the Japanese yen followed today’s announcement by the Bank of Japan regarding interest rates on deposits made using the yen.
However, the yen was unable to sustain its gains for the entire day as other major currencies rose higher against it to erase most of its gains.
The BoJ is keen on maintaining a weaker yen which is vital to Japan’s economy as most of the country’s industry rely on exports. A weaker yen ensures that Japan’s exporters get more yens when they exchange the different currencies, mostly US dollar’s that they earn from their exports.
The BoJ had been trying to reduce the yen’s bullish trend over the past two years with minimal success. The election of Donald Trump as the US President on November 8 marked a turning point for the yen as it triggered a strengthening of the Us dollar, which automatically weakened the Japanese yen.
The yen has lost about 11% of its value against the US dollar since the US presidential election, which has also triggered similar losses against other major currencies.
The USD/JPY currency pair was trading at 117.67 as at 18:17 GMT having tested lows of 117.09. The GBP/JPY was trading at 145.23 having reached lows of 144.83 earlier in the day. The EUR/JPY also reached lows of 122.01 and was currently trading at 122.65.
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