Policy Meeting Outcomes Pressure Yen

The Japanese Yen edged lower against its main rival, the U.S. Dollar as investors await a monetary policy decision from the Bank of Japan which could result in the further weakening of the Japanese currency. The new central bank governor has continually threatened that they will strive to meet and maintain a higher inflation rate via aggressive easing measures. However, given the tone of Haruhiko Kuroda’s most recent speech investors are concerned that the governor’s bark might be worse than his bite and could fail to follow through. As reported at 11:03 a.m. (JST) in Tokyo, the USD/JPY pair was trading at 93.50 Yen, a gain of 0.1% and edging farther from Tuesday’s 1-month trough of 92.57 Yen; in March, the greenback struck a 3½ year peak when it hit 96.71 Yen.

Similarly, the Euro also was broadly lower as market players look to the European Central Bank’s decision which is to be announced tomorrow. The EUR/USD pair was trading 0.1% lower at $1.2804, not far from the 4-month trough of $1.2750 established last week. Eurozone data releases continue to put pressure on the common currency with the most recently information showing that the Euro area PMI readings declined widely last month. Analysts expect that as a result of the collective data that Mario Draghi, the head of the ECB, could take on a more dovish tone at this month’s policy meeting.