The US dollar climbed to a five-year high against the yen on Wednesday, as investors focus on the release of the Federal Reserve (Fed) minutes which is expected to be released later in the day. The minutes are from the Fed’s last month’s meeting, where the Fed Chairman Ben S Bernanke confirmed the central bank would begin to reduce its monthly asset purchases.
The Japanese yen weakened against a basket of 16 major currencies, falling from its two-week high of ¥103.90 on Monday. The yen was weakened by the strong performance in the equities market in Tokyo, with the benchmark Nikkei and Topix index trading higher, adding over 1%. The Japanese yen lost 0.5% to 143.08 per euro, as the euro climbed 0.1% higher to $1.3632.
“Underlying yen sentiment remained bearish on the view that Japan would lag behind its counterparts in tightening monetary policy,” an analyst from Western Union said on Tuesday.
Following the Fed’s decision to reduce its monthly bond purchases, San Francisco Fed President John Williams said yesterday that the US central bank could possibly end the program this year if the US economy continuous to show signs of recovery and stability.”Faster or slower tapering will depend on the economy,” Williams said.
Last month, the Fed policymakers said they will begin to reduce its monthly purchases from $85 billion to $75 billion starting this month.
Japan
The yen weakened against the US dollar, while the Topic index advanced 1.4% higher.
“The stronger dollar, weaker yen trend remains intact,” said Akira Moroga, manager of currency products at Aozora Bank Ltd. “The gain in Japanese stocks is spurring risk-on sentiment” he added.
The Bank of Japan (BoJ) meeting is scheduled to take place January 22, with predictions that investors will continue to sell their positions to make profits on speculation of new quantitative easing measures from the BoJ.
Win a luxurious trip to the Maldives & up to $30,000 cash for trading with us!
Visit for details http://alturl.com/2kysk
The post US Dollar Advances Against Yen Before Fed Minutes appeared first on | HY Markets Official blog.
Article provided by HY Markets Forex Blog
