The Japanese yen paused its downfall today, but still trades near multi-year lows against other majors and is likely to continue experience weakness as the aggressive monetary policy erodes currency’s strength.
The Bank of Japan announced an impressive stimulating program last week, debasing the yen. The currency was falling since then and it does not look like the drop will end anytime soon. Usually, some form of correction follows a huge move in one direction, but the yen continues to drop without pause. True, the currency slowed its decline today, but only after reaching lowest prices in several years.
And there is no particular reason for the yen’s downfall to halt. Europe resolved its problems with Cyprus (or at least pushed them away for some time), reducing risk aversion. Concerns about Portugal and the poor US non-farm payrolls were not able to return the Forex market to the risk-off mode, meaning the safe role of the yen does not help the currency at present.
USD/JPY traded at 99.24 as of 4:26 GMT today after rallying to 99.65 — the highest price since May 2009. EUR/JPY was at 129.48 after climbing to 129.91 — the highest since January 2010. GBP/JPY traded near 151.54 following the advance to 152.05 — the strongest intraday rate since October 2009.
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