Yen Firms, Euro Dips From Recent High

After taking a swift hard drop on the first business day after the new Japanese government was elected, the Japanese Yen steadied finally on Tuesday. The Liberal Democratic Party is slated to take office soon and is seen as likely to move more aggressively than the incumbent government; as a result, this week’s meeting of the Bank of Japan policy makers is likely to yield an outcome more in sync with the LDP’s agenda, i.e. additional easing is forthcoming. As reported at 11:20 a.m. (JST) in Tokyo, the USD/JPY pair was trading at 83.36 Japanese Yen, edging off 84.48 Yen struck during yesterday’s trading session, a high not seen since April last year.

The Euro also held firm, holding steady against the U.S. Dollar as investors speculate that the U.S. economy may be on the verge of staving off a fall over the so-called fiscal cliff as the U.S. Congress and President Obama continue to work to find common ground. Analysts believe the common currency will benefit from a general improvement in investors risk appetite, even despite ECB’s recently expressed concerns that the Eurozone’s economy continues to exhibit slowed growth. The EUR/USD pair was trading at $1.3160, retreating from Monday’s peak of $1.3191, which was a 7-month high.