The Japanese Yen made gains against the Pound and edged higher against the US Dollar after Japanese finance minister Taro Aso dampened speculation that the government will cut corporation taxes.
The Yen is also receiving support from increased demand for safe haven currencies as worries continue to build over a possible shutdown of US Federal governmental departments as budget and political disputes wrangle on.
The Yen made gains against all of its most traded peers after Aso said that other sources of funds would be needed if a tax cut was brought into effect. His comments caused investors to reduce their bets that a tax cut was imminent, instead the Japanese government is likely to take time to see if such a cut is viable.
“It’s a question of cutting taxes or not. Views are changing. They expected them to cut corporate tax and then we get information that won’t be the case in the medium term. There is no clear direction,” said a senior currency strategist at Commerzbank AG. That uncertainty is what has sent investors to the safe haven Yen.
The currency’s gains could be short-lived however after credit rating agency Standard & Poor’s revealed that it could downgrade Japans debt rating if the country does not manage to shrink its budget deficit. Japan has the highest debt burden in the world at around 1,000 trillion Yen, more than twice the size of the nation’s entire economy.
Current Japanese Yen (JPY) Exchange Rates
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.6702
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 158.6516
The Euro/Japanese Yen Exchange Rate is currently in the region of: 133.2841
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 81.7287
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 92.0020
(Correct as of 12:20 pm GMT)