The Japanese yen fell versus commodity currencies but managed to hold its ground against other most-traded currencies today. Markets remained under the impact of the positive coronavirus vaccine news, which limited demand for safer currencies, including the yen.
Markets started the trading week in an optimistic mood due to the news that a COVID-19 vaccine from yet another drug producer is close to completion. Of course, it will take time for the vaccines to be widely available but the promise of a remedy from the coronavirus still encouraged traders to acquire assets associated with higher risk but also a potentially higher reward. There was limited demand for the Japanese currency in such an environment.
Haruhiko Kuroda, Governor at the Bank of Japan, was speaking today. He said that he does not think that the monetary policy needs to be changed at the present time but does not rule out such change in the future:
There is no need now to review our policy framework. But there could be debate at an appropriate timing in the future.
He dismissed the notion that Japan’s economy is heading towards deflation:
Our view is that Japan isnât heading toward deflation, though we’re watching developments in service consumption and capital expenditure carefully
USD/JPY fell from 104.50 to 104.22 as of 10:27 GMT today. EUR/JPY edged up from 123.74 to 123.92. CAD/JPY rallied from 79.81 to 79.99, touching the high of 80.15 intraday.
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