With the appeal of the US Dollar supported by the expectation that this week’s US news will show that the world’s largest economy continues to recover, the Yen fell to a two-week low against its American counterpart.
The Japanese Yen exchange rate was in the region of 98.3400 Yen to one US Dollar as of 10:30 am GMT
Both of tomorrow’s big pieces of US data, durable goods orders and house price figures, are expected to show improvement.
The Yen also weakened in response to the news that in the Tokyo elections Japan’s ruling coalition won a majority.
After Abe’s Liberal Democrat Party took 59 seats, with its coalition partner taking 23 seats, the Prime Minister asserted: ‘I think there is a degree of recognition for what we have achieved in the first six months of our administration. I will do everything I can to help many people feel that the economy has begun to improve.’
Abe’s victory in Tokyo has shown that his attempts to support Japan’s economy and bring persistent deflation to an end through measures such as unprecedented levels of quantitative easing have the support of the public.
Since April, and the introduction of a controversial bond-buying programme, the Yen has broadly declined. It could therefore be inferred that by approving Abe’s measures the public are also accepting the currency’s depreciation.
The Yen to Euro Exchange Rate Fell to 128.89 Yen
As one Tokyo-based foreign exchange expert comments: ‘Dollar-Yen is in focus after Abe’s victory in the run-up to upper house elections was even more clear-cut than thought. Markets see Abenomics as having become more feasible.’
While US news is likely to be the driving force behind fluctuations in the USD/JPY pairing in the days ahead, investors will also be focusing on this week’s Japanese news, including Tuesday’s small business confidence index, Thursday’s foreign bonds figures and Friday’s manufacturing PMI, household spending, CPI and jobless rate figures.
Current Japanese Yen (JPY) Exchange Rates
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.3400 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 151.1150 >
The Euro/Japanese Yen Exchange Rate is currently in the region of: 128.5670 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 75.5888 <
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 89.8995 <
(Correct as of 10:30 GMT)