By TraderVox.com
Tradervox.com (Dublin) – Finance Minister in Japan yesterday commended the work done by the Bank of Japan as he recorded that the foreign-exchange intervention done had yielded commendable results. In addition, the Bank of Japan Deputy Governor Hirohide Yamaguchi said that the bank will not hesitate to make more easing. His comments have indicated that the bank will be making some more easing since the yen has increased in July. The yen has increased against the dollar and is trading at near eleven-year high against the euro. A strong yen hurts the country’s exports which support economic growth. The yen has continued to strengthen as the country reported an unexpected trade surplus.
The BOJ Deputy Governor said that the central bank will not hesitate to loosen its monetary policy should the economy face difficulties in its recovery process. According to Hideo Kumano, who is a Chief Economist at Dai-Ichi Life Research Institute, the BOJ will remain in the easing mode as long as the global economy remains on a slowdown. He also indicated that the BOJ might expand its easing measures next month if the yen continues strengthening. The new BOJ policy board member Takahide Kiuchi indicated that there might be a need of new forms of monetary easing as the central bank takes a bigger role in the country’s currency.
The yen advanced against the dollar to trade at 78.20 per dollar in Tokyo while it advanced against the euro to trade at 94.42 yen. The yen has continued to attract safety seekers as debt crisis in Europe continues to worsen. According to David Rea of Capital Economics Ltd in London, the Bank of Japan will intervene depending on what happens in the euro region. Data from the region has continued to disappoint so far, with German Ifo Business Confidence decreasing for the third month in a row.
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