Since the Bank of Japan announced its intention of doubling monthly bond purchases the markets have been in a state of flux. The Yen has posted widespread declines; dropping to multi-year lows against several of its most traded peers, but after slipping to within 0.1 per cent of 100 Yen per Dollar, the Yen’s drop came to a halt.
The Japanese Yen exchange rate was in the region of 99.6700 Yen to one US Dollar as of 10:39 am
Official data revealing the sale of foreign bonds by Japanese investors allowed the Yen to post a slight gain on the US Dollar, easing the currency away from the close to four-year low of 99.88 Yen per Dollar achieved yesterday. The Yen was further supported after technical analysis indicated that it could recoup some of the 6.6 per cent loss recorded against the US Dollar since last week’s BOJ policy decision.
Economist Sebastien Galy said of the development: ‘It is quite a surprise to see that Japanese investors were net sellers of foreign bonds. The Yen’s gains today could be a factor of that negative surprise.’
In reference to the technical indicator, another industry expert stated: ‘There’s certainly some interest in the market to take profit on short yen positions, which is providing pause in the general Yen depreciation trend.’
The odds of the Bank of Japan taking further steps in order to bring persistent deflation to an end were lowered yesterday after Haruhiko Kuroda, Governor of the central bank, asserted that the unprecedented measures already announced would be enough.
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