By TraderVox.com
Tradervox (Dublin) – Minutes of the BOJ meeting have indicated that another asset purchases program is on the making confirming what BOJ’s governor has been saying. The yen has declined 1.3 percent over the week against it major pairs. Yen’s weekly drop comes as US economy shows some signs of recovery with more positive data expected to be released today. The sentiments by BOJ of further stimulus have prompted investors to look for higher yielding assets.
Sean Callow a Senior Currency Strategist in Sydney has indicated that the BOJ meeting has consistently been aimed at weakening the yen and this is yielding fruits as the currency has been the worst performer in all sixteen major currencies. The BOJ minutes released yesterday indicate that some members of were concerned of sending the wrong signal with the increased asset purchases and insisted that the BOJ should be very clear in explaining it actions to the public. They feared that the large bond purchases may be construed as financing government deficit spending.
The yen opened trading at 83.56 per dollar in London but later increased to 83.92 at 12:40 GMT. It had reached its weakest since April 13 yesterday when it traded at 84.18. The yen has dropped 1.3 against the dollar this week and 1 percent against the euro.
Bank of Japan has continued to put more effort in weakening the Yen as they expanded loans to the banks aimed at enhancing long-term growth on March 13. The announcement came the same day when the Fed raised their US economic outlook saying that the unemployment is set to reduce gradually and the economy expected to register a moderate growth.
Measures taken by the BOJ seem to be working as the economy has shown some signs of recovery from last year’s tsunami and earthquake. The BOJ has put on hold this month’s asset purchases as it monitors the situation and effects of the last asset purchases. Positive reports from the US seem to be aiding the BOJ’s plan to weaken the yen.
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