The Japanese Yen is trading at its lowest level in five years against the US Dollar, Euro and Sterling as economists increased their bets that the Bank of Japan and US Federal Reserve will highlight a divergence between the US and Japanese economies when they gather for policy meetings next week.
“The prospect of Fed tapering, either sooner or later, and continued monetary easing by the Bank of Japan remain a powerful driver of Dollar-Yen gains specifically, and obviously broad Yen trade-weighted depreciation,” said the global head of currency research at Slandered Chartered Plc.
The Bank of Japan is expected to maintain its monthly 7 trillion Yen purchasing of Japanese government bonds when it begins its two day long policy meeting on December the 19th. According to Bank Governor Haruhiko Kuroda the Bank will keep its easing policy in place beyond its target of two-years in order to kick-start inflation in the economy.
The Federal Reserve in contrast is expected to taper its $85 billion per month monetary easing programme at next week’s meeting. A recent run of positive US data releases has bolstered investor expectations for a cut.
On Friday the Pound softened slightly against the Yen and most other peers as speculation grows that gains which saw the U.K. currency reach multi-year highs against a number of peers were excessive.
“We’ve seen the pound give back some of its recent strong gains over the past week,” said a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “It’s a good reflection that the pound had got ahead of itself in strengthening in the near term but we are still confident that overall strengthening trend remains in play.”
Current Japanese Yen (JPY) Exchange Rates:
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 103.6652
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 168.6100
The Euro/Japanese Yen Exchange Rate is currently in the region of: 142.2655
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 85.0746
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 92.3565
(Correct as of 12:00 pm GMT)