Posts Tagged ‘bank of japan’

The yen strengthened beyond 100 per dollar for a second time this week as the U.S. currency’s bid to break out from a three-month low stalled after Federal Reserve minutes indicated officials were divided over the urgency to raise interest rates.

A gauge of the dollar has fallen more than 5 per cent this year as investors bet the Fed will raise interest rates at most once this year, compared with policy makers’ forecasts at the start of 2016 for four increases.

That means the U.S. central bank is less likely to diverge from the Bank of Japan and European Central Bank, which are boosting stimulus to spur flagging growth.

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The yen rose more than 1 per cent against the dollar and the euro on Tuesday (July 26), as traders dialled back expectations of how much new stimulus Japanese authorities will inject into an ailing economy.

The Bank of Japan is expected to announce expanded asset purchases and a rate cut further into negative territory at the end of its policy meeting on Friday (July 29).

Meanwhile the government is compiling a spending package that some sources have estimated could be worth up to 20 trillion yen. But a Nikkei report on Tuesday (July 26) said direct fiscal stimulus into the economy would amount to about 6 trillion yen over the next few years.

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Less than two months after Goldman Sachs Group Inc. softened its short-term euro forecast after a central-bank policy meeting, the bank is doing the same with the yen.

Japan’s currency is likely to strengthen until Bank of Japan Governor Haruhiko Kuroda rolls out or signals additional stimulus measures, analysts led by Robin Brooks, the bank’s chief currency strategist, wrote in a note to clients on Monday.

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Eyes on the Euro?

There are a few key points to mention in this latest segment of online Forex trading news.

This week, the relationship between the dollar and the euro remained relatively unchanged after unexpectedly weak American housing data was released.

Analysts had expected the market to rise a single percentage point and yet, statistics showed that sales dropped 1.5 per cent.
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One of the dominating forex news stories centres around the relationship between the US dollar and the Japanese Yen. We have seen a rally, albeit perhaps briefly, against the dollar when online trading analysts learned that the Bank of Japan has not modified their domestic monetary policy as was moderately expected.

This decision was defended by the governor of the central bank when he stated that there is less volatility in the government bond markets than previously. This announcement led to the dollar declining 1.78 percent in comparison to the Yen during the American trading session on Tuesday. Some online traders and forex brokers believe that this leveraging of Japan’s currency and the resultant decline in equities may attract investment from abroad.
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As we previously predicted it became inevitable for Bank of Japan (BOJ) to hold back its plans for intervention. JPY/USD went from 83 yen per dollar to 85.47 shortly after the intervention.

Strong yen – harmful for Japanese economy says Noda

Early this morning (9:30 ET) Yen reached a new 15-year high. This time, Bank of Japan was quick to intervene in the currency markets, selling yen in exchange for us dollars, after a week of possible intervention warnings. This intervention was made to counter the adverse impact of the strong yen, and was the first official intervention in the currency market since 2004.

“We conducted the intervention in order to avoid excessive movement in the currency market. The Bank of Japan will continue to (more…)

The yen surged to 15-year low on Friday against the dollar as fading confidence for the global economy have risen demand for the Japanese currency.

Will Bank of Japan intervene?

The latest move raised currency speculation of the Japanese central bank intervening in the forex market, which is rather uncommon (more…)