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JPY Daily News
USD-Supplied Money-Market Operations Introduced to Japanese Economy
The JPY underwent a bearish trading session yesterday, as it depreciated against all of its major currency rivals. In early trading, the Asian currency rallied against the USD, backed by unwinding carry trades, as investors abandoned the USD to purchase higher yielding, yet riskier, assets. After the joint action by the world central banks to inject liquidity into the market, the JPY was no longer considered a safe haven because such a move made the risk of global currencies decrease significantly. The USD rose 1% against the JPY, closing at 105.36, while the EUR rose 1.2% to 151.22.
Another major initiative that was enacted yesterday came from the surprise announcement that for the first time in its history the Bank of Japan will introduce USD-supplied money-market operations in an effort to deal with strong USD demand. In other news, traders saw the release of the Bank of Japan's (BoJ) Monthly Report yesterday, which stated that it has cut its assessment of business investment, citing low corporate profits. The BoJ also reiterated its view about a sluggish economy in part because of high energy costs and weakening export growth.
Today, the JPY will be absent from the economic calendar and traders are advised to follow global developments instead. It would be wise for traders to follow the USD, EUR and GBP today as they are more likely to determine the JPY's movements
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