By James McKee
The Japanese Yen has begun to slide against other major currencies, which signals some headway being made by the Bank Of Japan regarding devaluing the Yen so inflation does not hurt their export revenues. Considering that Japan is an almost exclusively exporting country their economy would suffer more than many nations would if inflation takes hold of the island nation. Due to inflation that has already occurred Japan has shut down many factories due to decreased demand for their goods, and in turn unemployment and poverty in Japan have risen exponentially. The homeless population in Japan has also exploded prompting the construction of shelters to house Japanese citizens who find themselves falling on hard times.
The Bank Of Japan has lowered its interest rates as close to zero as it ever has, and only a week later does it take any sort of effect. This is ominous for Japan because there are no more cards left to play where their central bank is concerned. The United States who has always been an ally of Japan is far too busy with their own financial turmoil to aid the country as it slumps further and further into quagmire which no one can see the end of.
While the Yen has dropped slightly today a correction is certainly in the works for the near future. I would avoid pairing the Yen with the USD due to the USD’s extremely volatile nature as of late. The AUD still has some steam in it from the recent increases in the value of gold, considering Australia is the world’s third largest producer of gold it is a logical connection to make that the AUD will be rising in the short term. Considering that the value of gold is going nowhere but up since the world’s economies are going through the floor the AUD is definitely one to pair with the JPY due to its imminent correction. Stay vigilant and be critical of any data coming in that contradicts your instincts, happy trading!
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.
