After sliding to a more than-four year low against the US Dollar last week, of over 103 Yen per Dollar, the Asian currency was able to modestly recoup losses as a result of comments issued by Japan’s Economy Minister Akira Amari.
The Japanese Yen exchange rate was in the region of 102.4300 Yen to one US Dollar as of 10:00 am GMT
During an interview for NHK Amari stated: ‘It’s being said excessive Yen gains have been corrected a lot. If the Yen extends losses a lot, people’s lives will be negatively affected. It’s our job to minimise that.’
Amari’s assertion caused the Yen to briefly climb by 1.1 per cent against the US Dollar before a downward correction saw it trading in the region of 102.67 ¥ per Dollar. The safe-haven Asian currency also advanced on the Euro.
As currency strategist Mike Jones states: ‘The market has been spooked by official suggestions the bulk of the Yen depreciation may be behind us. Speculative longs in US Dollars have crept up to extreme levels and the comments sparked a dash for the exit.’
Since the Bank of Japan implemented unprecedented levels of monetary easing in April the Yen has weakened considerably, but it seems the decision to double the level of monthly bond purchases is having a positive effect on the nation’s economy.
During the local session the Japanese Government upgraded its assessment of the economy.
In a monthly report issued by the Cabinet Office it was stated that improvements in factory output and exports are helping to bolster economic growth, and could continue to lend support in the months ahead. The decision to upgrade the economy for the first time in two-months was justified in the following terms: ‘We expect the economy to continue to recover as exports improve and as economic stimulus and monetary policy steps bolster sentiment.’
According to one senior economist: ‘Manufacturers had been lagging the services sector, but a weak Yen and improvements in the US economy mean that manufacturers’ sentiment is starting to catch up. This is in line with the bullish scenario that the BOJ has laid out. There’s no need to change policy.’
Meanwhile Economics Minister Amari commented: ‘We are implementing fiscal and monetary policies under Abe’s administration, and this has set the stage for a V-shaped recovery. Normally exports lead growth, but this time consumer spending is playing the leading role.’
The Bank of Japan will announce its rate decision on Wednesday. The majority of economists are forecasting that policy will remain unaltered.
Current Japanese Yen (JPY) Exchange Rates
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The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 102.4300 <
The Pound Sterling/Japanese Yen Exchange Rate is currently in the region of: 155.8470 <
The Euro/Japanese Yen Exchange Rate is currently in the region of: 131.8680 <
The New Zealand Dollar/Japanese Yen Exchange Rate is currently in the region of: 83.4537 >
The Australian Dollar/Japanese Yen Exchange Rate is currently in the region of: 100.3280 >
(Correct as of 10:00 GMT)
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