Yen High against the Dollar on BOJ Inaction Speculation

By TraderVox.com

Tradervox.com (Dublin) – The yen has continued on its advance against the dollar for the third day as signs of deteriorating Europe debt crisis signals difficulties in economic growth in major world economies. The yen also advanced as investors speculate that the Bank of Japan will refrain from adding stimulus in the economy hence allowing the currency to strengthen. The safe haven demand which was sparked by the deteriorating Asian stock has pushed the Japanese currency to a one-month high versus the euro. This came as a court in Germany showed signals of considering a case that may decide the future of the monetary union’s bailout mechanism.

Increased turmoil in Europe has led the 17-nation to decline against most major currencies in the world with the currency declining to 0.2 percent from a record low against the Australian dollar. This came prior to some data from Germany expected to show inflation slowed and stagnation in manufacturing in the euro region. The yen increased against the dollar as the greenback experienced difficulties in demand prior to the release of the Federal Reserve meeting minutes.

According to Callum Henderson who is the Global Head of Currency Research in Singapore at Standard Chartered Plc, the BOJ is set to make further easing on its policy but it will not be at this meeting. If this is the scenario, the yen will continue to strengthen against the US dollar and the greenback which is detrimental to the country’s economy.

The yen traded at 79.35 per dollar during the Asian trading session from a close of 79.43 yesterday. The Japanese currency also traded at June 5 high of 97.10 against the euro before losing to 97.31 which is close to its yesterday’s close in the New York session. The 19-nation currency was trading at $1.2263 down from 1.2259 it closed yester after it touched $1.2235 which is the lowest it has been since July 2010.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox