The US Dollar was on course to touch its highest level in five years against the Japanese Yen on Wednesday after the US currency gathered strength before the release of the Federal Reserve’s December policy meeting minutes.
The currency received support on Tuesday after trade data showed that the trade deficit of the world’s largest economy shrank to its smallest margin in four years in November as exports climbed to a record high.
On Wednesday the Dollar gained in strength as investors focus on the Fed’s December policy meeting. They are looking for indications as to when the Central Bank will choose to implement tapering and will be looking for signs for the possible timing of further cuts to its stimulus programme.
As expectations rise that further tapering will occur the ‘Greenback’ was broadly higher against its commodity based relations such as the Canadian, Australian and New Zealand Dollars.
“The Fed is going to continue to push the message of moderate tapering, but I think they will provide a very bullish outlook for the economy, we are looking for the Dollar to continue to gain broad support,” said an economist at Morgan Stanley.
The Yen has weakened in recent days due to the markets highlighting a divergence in the Japanese and US economies. Where the US is looking to bring its stimulus measures to an end the Bank of Japan is persevering with its easing plan to buy more than seven trillion Yen in its bid to boost inflation.
Current Japanese Yen (JPY) Exchange Rates:
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 104.99
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 172.40
The Euro/Japanese Yen Exchange Rate is currently in the region of: 142.80
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 86.876
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 93.595
(Correct as of 11:00 am GMT)
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