Japanese yen is losing ground today, dropping against its major counterparts, as stimulus efforts boost the Nikkei, but weaken the currency.
Earlier this year, the Bank of Japan announced an ambitious stimulus plan that involves doubling the monetary base. With the economy being flooded with yen, the currency has been weakening. Today all that weakness resulted in a surge for the Nikkei stock index. The Nikkei struggled a great deal last week, ending lower. Today, though, the index experienced its biggest single gain in about two years.
Continued yen weakness is likely, and the Asian currency is down today against its major counterparts. There is little to support yen, since there is also a measure of risk appetite on top of the easing measures employed by the BOJ. US payrolls data were reasonably strong, supporting some hopes that the US economy will continue its recovery. Additionally, there are hopes that the eurozone might soon be on the road to recovery after Francois Hollande‘s remarks that the eurozone crisis is over.
There isn’t a lot to turn things around for the yen, but that probably won’t bother Japanese leaders; they prefer a weak yen.
At 13:47 GMT USD/JPY is up to 99.1550 from the open at 97.8535. EUR/JPY is up to 130.8220 from the open at 129.1350. GBP/JPY is up to 153.8155 from the open at 151.8750.
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