Fed Minutes Give Greenback a Boost

The U.S. Dollar held close to a multi-year peak versus the Japanese Yen following the release of the most recent minutes of the U.S. Federal Reserve’s Federal Open Market Committee wherein the Fed indicated that there was the likelihood that the current open-ended asset purchases would be scaled back by year’s end. Those minutes were in stark contrast to the Bank of Japan’s stance which by any account is clearly ready to further weaken the Japanese Yen with an ultra-loose monetary policy in an attempt to meet the 2% inflation target.

As reported at 1:20 p.m. (JST) in Tokyo, the USD/JPY pair was trading at a high of 99.88 Yen during Wednesday’s late trading in New York since last week when the Bank of Japan’s new policy setting committee unveiled a new and radical monetary policy the Japanese currency has lost more than 7% of its value against its main rival, the U.S. Dollar. The pair has yet to break through the 100.00 Yen barrier level but many currency strategists feel it is only a matter of days with a likely test of 101.45 Yen thereafter, a level unseen in nearly four years. BNP Paribas’ strategists are forecasting the pair to rise steadily throughout the year, culminating with a price of 105 Yen by the end of the year.