The Japanese Yen continues to be under heavy and widespread sell pressure as market players await the outcome of this week’s policy setting meeting by the Bank of Japan. Analysts confirm that investors are either sitting on the sidelines or selling off the Japanese currency in anticipation that the BOJ will commit to the newly installed government’s aggressive policy to restore the economy. Some analysts believe that the central bank might commit to open-ended asset purchases to continue until a 2% target inflation rate is met.
As reported at 1:50 p.m. (JST) in Tokyo, the USD/JPY pair was trading 0.12% lower at 90.07 Yen, off Friday’s high of 90.21 Yen; currency analysts put immediate resistance near 90.34 Yen. The EUR/JPY pair also didn’t stray far from 120.73 Yen, a recently struck 20-month high, while the AUD/JPY pair held close to Friday’s peak of 95.02 Yen, a fresh 4-year high.
In a note to clients, Barclays Capital analysts say that their expectations are for further easing irrespective of the make-up of the current BOJ decision makers as their tenure draws to a close and expectations are high that the Japanese government under Prime Minister Shinzo Abe will nominate a decidedly dovish contingent to replace them in April.
Yen Pressure Relentless Ahead of BOJ
Barbara Zigah