The Yen slipped to 99.90 per US Dollar over the weekend after Haruhiko Kuroda, Governor of the Bank of Japan, expressed his confidence in the central bank’s decision to double monthly bond purchases.
The Japanese Yen exchange rate was in the region of 99.6700 Yen to one US Dollar as of 09:50 am GMT
Last week the G-20 (a group of 20 finance ministers and central bank chiefs) met for a two day conference to discuss global financial concerns.
Although competitive currency devaluation has been a contentious issue in recent months the G-20 praised, rather than censored, the BOJ’s recent fiscal policy measures – despite the fact that the Yen has weakened by over five per cent against the US Dollar since they were announced.
The G-20 intimated that although a weakening Yen could have an impact on other economies, the support it would lend to domestic demand made its depreciations worthwhile.
The BoJ hopes that its current policy will help to bring deflation to an end within two years.
After the G-20 gathering came to a close Haruhiko Kuroda announced: ‘Winning international understanding gives me more confidence to conduct monetary policy appropriately. We will continue our qualitative and quantitative easing for the next two years.’
The BoJ is due to issue its next policy statement on the 26th of this month, and some industry experts feel that further weakening of the Yen should be expected.
As currency strategist Ray Attrill observed: ‘There’s nothing really in our view to stop the Yen from continuing to weaken. We’re having a little bit of tug of war, I think, up close to 100. I’ve no doubt we’ll go through it at some point.’
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