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Yen Slump Resumes in New Week

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  • 04 February, 2013 GMT

By: DailyForex.com

A new week began much as the old week did, with the Japanese Yen under unrelenting sell pressure as investors wonder how far the Japanese central bank will have to ease in order to bring under control several years of dogged deflation. In a client note, Barclays Bank analysts caution that the Japanese government is committed to the new 2% inflation target and intends to achieve it through the central bank’s monetary policy with even more aggressive stimulus measures which should result in a rise in inflation.

As reported at 11:11 a.m. (JST) in Tokyo, the USD/JPY pair was trading at 92.80 Yen, off the 2½ year peak struck on Friday when the pair traded at 92.97 Yen. Currency analysts believe that now that it has broken through one resistance level, a retest of 95.00 is looming. The EUR/JPY pair was also edging higher, trading at 126.97 Yen and approaching 2010’s high of 127.46 Yen; recently the Euro had given back some gains and was trading at 126.79 Yen. Thus far in 2013, the Euro has risen nearly 2% on the Yen, while the U.S. Dollar has surged almost 7% in comparison.

The Euro has been outperforming many of its peers and not just the Yen; in 2013, the Euro has gained 3.5% against its chief rival the U.S. Dollar, and was recently trading at $1.3647, edging off Friday’s peak of $1.3710 which was struck following the data release which showed better than expected output among Eurozone factories.

Barbara Zigah

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.

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