JPY Daily News

Will Japan Follow America's Aggressive Monetary Policy?

The recent Interest Rate cut in the U.S. sent the USD/JPY tumbling down below the 88 Yen level. Yesterday the JPY showed a bit of spark, reaching the 87.12 mark. This is a level not seen for nearly 13 years. The Yen is up more than 25% this year vs. the Dollar. The bullishness of the Yen has had some negative effects on the Japanese economy. For example, an appreciation of the JPY has significantly hurt Japanese exports, which make up a large percentage of the Japanese economy.


Currently U.S. Interest Rates are lower than Interest Rates in Japan. The U.S. rate cut has put more pressure on the JPY and also on the Japanese government to further cut rates. Japan has historically had one of the lowest Interest Rates, making the carry trade a profitable trading strategy. Some economists are calling for further rate cuts in Japan to help weaken the Yen. The Bank of Japan (BoJ) meets on Friday to determine Interest Rate Policy. We may see some further weakening in the USD/JPY as the BoJ Interest Rate decision nears. Look for the pair to trade perhaps near the lower 87.00 level.


We have yet to hear of direct intervention in the currency market by the Japanese government, though tough talk has been heard from the Japanese Finance Minister. However the market appears to be shrugging off these comments. These may be one of the tools the Japanese government is using in an attempt to artificially boost the Yen.

Current Time: 05/27 00:01 GMT

Add events to google calendar Mark all Unmark all Print

#	Time	$€£¥	Event	Per.	Prev.	Fore.	Act.	Imp.
12/18
	23:50	JPY	All Industries Activity	m/m	-0.0%	-0.8%	-0.5%