JPY rose after meeting of the local central bank
The JPY rose and gained ground against the dollar for the second straight day after held earlier today a meeting of the central bank. The main news of the meeting was related to the speech of Prime Minister Shinzo Abe, who emphasized the shortcomings that weaker yen has on the economy. On the other hand […]
The JPY rose and gained ground against the dollar for the second straight day after held earlier today a meeting of the central bank. The main news of the meeting was related to the speech of Prime Minister Shinzo Abe, who emphasized the shortcomings that weaker yen has on the economy. On the other hand in today’s euro held cumulative gain against the dollar despite another dose of disappointing news for the German economy. The JPY broke the negative performance and took advantage against the dollar after Shinzo Abe made a statement in parliament in Tokyo, commenting on issues around cheap local currency. He commented that the depreciation of the yen burden households and small firms as significantly increased fuel prices. On the other hand the weaker yen has its advantages for the economy because it stimulates exports.
Since coming to power in December 2012, Abe take massive financial incentives and supporting policies that can cope with the depressed economy. These actions led to a sharp depreciation of the yen and the expectations are that the yen will continue to weaken. Against this background, the meeting of the Bank of Japan did not surprise investors. Central bankers adhere to current policy and do not intend to make changes in the medium term, analysts commented.
In the early hours of the European session, the single currency lost more than 0.3 percent against the dollar, returning of the earnings on Monday. Pressure on the euro already indicated another dose of disappointing economic news from Germany. Industrial production in Europe’s leading economy has shrunk by as much as 4% in August, significantly surpassing analysts’ forecasts for a decline of 1.6%. The decline is explained by the traditionally weaker summer months, but a significant discrepancy with the predicted values is cause for concern.
In today’s eyes again will be directed overseas, where the Fed chairman to New York and Minneapolis will make statements. The comments come a day before the expected interest transcript of the meeting of central bankers, which will be delivered on Wednesday. One EUR is exchanged for 1.2620 against the USD today. GBP/USD is around 1.5080, again close to opening levels for today. At the same time the exchange rate was 108.60 JPY.
