Japanese yen fell today on speculations that the upcoming parliamentary elections in Japan may reinforce Japanese Prime Minister Shinzo Abe’s push for policies aimed at weakening the currency.
The vote on July 21 may help Abe to secure both chambers of the parliament. In such case he will have more freedom in implementing measures to support the nation’s economy. One of such measures was weakening of the yen. The currency halted its decline after policy makers paused expansion of stimulus, but remains very vulnerable.
The yen also fell as Federal Reserve Chairman Ben Bernanke alleviated fears of quantitative easing reduction. He explained that trimming of asset purchases is not imminent and assured that it does not mean tighter monetary policy. Such comments eased risk aversion, damping the yen’s appeal as a safe haven.
USD/JPY rose from 100.40 to 100.78 as of 00:20 GMT today. EUR/JPY advanced from 131.58 to 132.04, trading near the highest level since May 24, and GBP/JPY went up from 152.83 to 153.30, the price not seen since June 16.
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