The Japanese Yen has weakened against all of its most traded peers after the Bank of Japan’s new governor Haruhiko Kuroda outlined his monetary easing options to achieve a 2% annual inflation goal in two years time.
The Japanese Yen exchange rate was in the region of 94.0407 Yen to one US Dollar as of 09:00 pm
“Achieving the 2% inflation target in two years is something that I have in my mind,” Kuroda said in the lower house of parliament.
Kurodas pledge has left traders unconvinced. Stephen Roach, former non-executive chairman for Morgan Stanley told Bloomberg; “It is a strong pledge from a well-intended man, but I’m not convinced it’s going to work. It’s going to take a lot more to bring Japan out of its long slump than just another effort at quantitative easing.”
The Japanese currency snapped three day of gains against the US Dollar after Kuroda told lawmakers that the Bank of Japan will potentially opt to purchase more bonds with longer maturities. Currently the bank buys government debt maturing in three years or less through its $807 billion asset-purchasing programme. He also hinted that the BOJ could scrap its banknote rule of keeping central bank bond holdings at less than the value of held banknotes.
In the past six-months the en has fallen in value by 17%, making it the biggest declining currency among the ten ‘developed nation’ currencies.