Yen Slides as Japan Steps Up Threats of Intervention

May 19, 2016

The yen remained steady on Monday, fueled by Japan’s move to step up threat of intervention in the currency market ahead of the Group of Seven meeting this week, setting-off earlier gains as Chinese data resulted disappointing.    

Top currency diplomat of Japan Masatsugu Asakawa mentioned that excess volatility could be exposed to unfavorable effects on the economy and that the G7 and G20 countries have consistently discussed solutions with unrestrained currency movement.  

Japan is scheduled to host a G7 finance ministers and central bankers summit this coming May 20-21 during discussions that Tokyo seemed to encourage support to respond to the strengthening yen. 

Subsequently, the vice finance minister for international affairs Asakawa stated that Japan is not certain on the recent reporting in the currencies of the U.S. Treasury, suggesting to warn against unilateral intervention in currency markets.  

Investors cut potential positions in the yen, and Japan is expected to steady the monetary policy sooner instead of boost inflation, including growth of investors’ sentiment.

The dollar increased 0.1 percent at 108.75 yen, hitting a two-week high of 109.57 on Friday after the recent U.S. data turned positive. Meanwhile, the yen has seen a slight increase in Asian trade after investments in China, including factory output, and sales in retail have missed estimates.   

Credit Agricole currency analyst Manuel Oliveri said, "There may be rising scope of the BOJ considering a more aggressive policy stance later on."

"It must still be kept in mind that inflation expectations as measured by five-year inflation swaps remain close to multi-year lows and that Governor (Haruhiko) Kuroda appears to make a bigger case of additional measures being considered should it prove necessary," he added.

Kuroda stated that the Bank of Japan (BOJ) has sufficient room for easing, citing negative rates were adopted earlier this year.

Keep updated on the market news and events to make better trades!

Publication source
Trade12 information  Trade12 reviews

October 24, 2016
Important economic events for the coming week
Monday, October 24, 2016 - JPY Small Business Confidence (OCT), EUR Markit/BME Germany Manufacturing PMI (OCT P), USD Markit US Manufacturing PMI (OCT P)...
October 21, 2016
US Presidential Election: Final Debate Aftermath
With the dust having settled after Wednesday final US presidential debate of the 2016 campaign between Donald Trump and Hillary Clinton, the results have become rather apparent...
October 20, 2016
Doting on Draghi
The ECB meeting arrives today when EURUSD is testing key levels. The mid-year lows at 1.0952 is perilously close as I write, whilst the post-Brexit referendum low of 1.0913 being in the frame after that. It’s hard to see the ECB adding to its quantitative easing policy...

FIBO Group Rating
Tickmill Rating
FXCM Rating
Orbex Rating
Grand Capital Rating
FBS Rating

Beeoptions Rating
OptionRally Rating
Porter Finance Rating
OptionsXO Rating
365BinaryOption Rating
Banc De Binary Rating