At last week’s policy meeting the Bank of Japan opted to maintain stimulus at its current level and used the term ‘recovery’ for the first time since 2011. Now, with the minutes from the meeting released, the Yen has weakened against currency rivals including the US Dollar and British Pound.
The Japanese Yen exchange rate was in the region of 151.3640 Yen to one British Pound as of 10:30 am GMT
After the policy meeting BOJ Governor Haruhiko Kuroda commented: ‘We believe we have taken sufficient measures to achieve the price stability target of 2 per cent in a time horizon of two years. I’m confident we can achieve the target, although we may need to address upside and downside risks.’
In the minutes one BOJ official stated that as it stands it is reasonable for the central bank to maintain its current stimulus measures for roughly two years, but that they should be reassessed after this time. It was also commented that if the market expects that the measures will be maintained for a longer time or significantly expanded it could lead to instability.
The GBP/JPY exchange rate hit a high of 152.1460
The Yen’s decline against the Pound was acerbated after the British currency broadly strengthened following the publication of minutes from the Bank of England’s July policy meeting.
The minutes showed that of the nine members of the Monetary Policy Committee, all opted to keep the bond-purchase target at 375 billion Pounds.
For the last few months the vote has been split, with several members pushing for the level of asset purchases to be increased, so this show of unity is reassuring.
The USD/JPY exchange rate is expected to experience movement in the hours ahead as a result of Federal Reserve Chairman Ben Bernanke’s announcement.
According to foreign exchange expert Masato Yanagiya: ‘The Dollar is unlikely to be sold in the long term. The market consensus is for the Fed to taper quantitative easing in September.’
Current Japanese Yen (JPY) Exchange Rates
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 99.6900 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 151.3640 >
The Euro/Japanese Yen Exchange Rate is currently in the region of: 131.0820 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 78.2367 >
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 91.7646 >
(Correct as of 10:30 GMT)