JPY Daily News

JPY May Rise to 80 against the Dollar by Mid-Year

The Japanese currency picked up steam again on Wednesday, prompted by a government stimulus package that has provided a boost to market and risk sentiment. The Yen's strength took the EUR down 0.7% to 115.52 Yen, while the Dollar eased 0.2% to 89.05 Yen. It strengthened to 87.13 on Jan. 21, the strongest level since July 1995, after gaining 23% last year as the global financial turmoil spurred investors to buy back into Japan's currency as they unwound carry trades.

Additional Yen appreciation is likely to shrink profits of exporters even further, weigh on share prices, and induce an increase in the repatriation of funds to Japan. According to analysts, this can become the worst-case scenario facing the Japanese government since a strong Yen is the most critical problem for exporters. As exports fall, economies shrink, deepening the recession and pushing the value of the Yen even higher, causing more damage and creating a downward cycle of harmful data for the Japanese economy.

Current Time: 05/27 03:14 GMT

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