During the local session the Yen slid against all of its main counterparts, weakening to ¥102.24 per Dollar as the Bank of Japan forecast that deposits held in custody by them for financial companies will rise to record levels today.
The Yen was also adversely affected by comments issued by one of the Japanese Prime Minister’s advisors and the expectation that today’s US data will show improvement.
The Japanese Yen exchange rate was in the region of 102.2500 Yen to one US Dollar as of 10:10 am GMT
The deposits retained by the central bank on behalf of financial institutions are expected to hit a record 72.4 trillion Yen in the hours ahead.
Meanwhile, according to Koichi Hamada (one of PM Shinzo Abe’s advisors) BOJ Governor Haruhiko Kuroda must ‘continue to trust in his judgement and ease further’ if it should prove necessary, as the present level of stimulus is working ‘as well or better than expected.’
Conversely, while BOJ policy board member Ryuzo Miyao also acknowledged that the Japanese economy is picking up, when speaking at the Foreign Correspondents Club only a few hours ago he asserted that the central bank has instigated enough stimulus for the present.
As the European session progressed the Yen tumbled to 131.93 against the Euro, shedding 1.1 per cent.
According to one currency strategist, ‘The underlying trend still remains for a weaker Yen. Investors will continue to become more convinced that Abe’s policies will work. The Japanese equity market has stabilized.’
The Yen could soften further this afternoon if two pieces of influential data meet economists’ expectations. Industry experts have forecast that today’s US consumer confidence and home price figures will show improvement, with consumer sentiment rising from 68.1 in April to 71 this month.
If this influential US economic news comes in at or above expectations it will increase the odds of the Federal Reserve beginning to taper stimulus in the months ahead, and as currency strategist Yuji Kameoka notes: ‘I expect to see further Yen weakness as economic indicators improve in the US and other countries. Japan’s monetary easing will underpin the Yen’s decline.’
Current Japanese Yen (JPY) Exchange Rates
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 102.2500 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 154.2450 >
The Euro/Japanese Yen Exchange Rate is currently in the region of: 131.8580 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 82.8803 >
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.7070 >
(Correct as of 10:10 GMT)
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