The Japanese Yen is hovering close to a six-week low against the US Dollar ahead of the release of key US jobs data that is likely to cement expectations for a reduction in the US Federal Reserve’s stimulus programme on the 17th of September.
The Dollar is trading above the 100 Yen mark for the first time in six weeks with traders saying that the Yen has suffered due to investors winding down their safe haven buying after the threat of an imminent military strike against Syria waned. The Bank of Japan’s decision to maintain interest rates at 0% had little impact on the markets.
“We still expect USD/JPY to move higher heading towards 105 by the end of the year, that in our view will largely be driven by the US Federal Reserve starting to taper their Quantitative easing programme which we see leading to a stronger US Dollar” said Khoon Goh, senior currency strategist at ANZ.
The deterioration in Japans trade balance is also hurting the Yen. In July the nation posted a deficit of Y1 trillion, marking 13 consecutive months of shortfalls. The rise in the deficit is a result of the necessity for Japan to import energy required for electrical production after the government chose to shutdown most of the country’s nuclear reactors following the devastating 2011 earthquake and tsunami.
Investors are waiting for next steps from Japanese Prime Minister Shinzo Abe to see how far he will go in his plan to reinvigorate the economy. Economists say that deregulation in the medical and agricultural sectors are important, although politically difficult.
Current Japanese Yen (JPY) Exchange Rates:
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 100.0569 >
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 156.1198 >
The Euro/Japanese Yen Exchange Rate is currently in the region of: 131.9039 >
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 78.6971 >
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 91.3909 >
(Correct as of 10:10 am GMT)
Comments are closed.