The Yen has strengthened for a fourth-day in a row as world leaders prepare to gather for a meeting of the G-20 and investors speculate over who the next governor of the Bank of Japan could be.
The current deputy governor of the BOJ Toshiro Muto is being touted as the leading contender to become the next Central Bank chief.
“Muto is perceived as not as dovish as some of the candidates, so that’s weighing on Dollar-Yen,” said Sean Callow, senior currency strategist at Westpac Banking Corp. “A significant amount of the Yen’s decline has been in not so much what the BOJ has done in the period but what they’re expected to do in the next year or two.”
The current Bank of Japan Governor Masaaki Shirakawa has been criticised by politicians for not doing enough to tackle deflation in Japan and rumours abound that Prime Minister Shinzo Abe is close to choosing his nominee for the BOJ’s top job.
Meanwhile in Russia the G-20 is preparing to gather to discuss the issue of currency devaluation and to try and avert the possibility of a global currency war, a war that Japan could be blamed for being the cause of.
Abe’s plans to strengthen the Japanese economy have seen the BOJ increase monetary stimulus in a bid to overcome a decade of deflation. The consequences of which have seen the Yen plummet in the forex market. The decline has drawn criticism from the Germans. Wolfgang Schaeuble the German finance minister has openly criticised the Japanese strategy.
The G-20 is expected to reaffirm a pledge to refrain from competitive devaluation. Whether Japan and other nations will stick to that remains to be seen.
A currency ‘war’ is still a possibility.
Current JPY exchange rates
These exchange rates were correct as of 09:45 am
The Japanese Yen to Pound Sterling exchange rate is currently trading at 0.0069
The Japanese Yen to US Dollar exchange rate is currently trading at 0.0108
The Japanese Yen to Euro exchange rate is currently trading at 0.0081
The Japanese Yen to Australian Dollar exchange rate is currently trading at 0.0104