Yen’s Broad Fall Seemingly Relentless

The Japanese Yen edged broadly lower as investors found little reasons to hold onto the currency with the knowledge that the Bank of Japan intends to aggressively tackle the country’s deflationary status. Since last week’s policy meeting, and with the affirmation that the newly composed policy setting committee would not be following in the footsteps of their more timid predecessors, the Japanese currency has depreciated nearly 8% against its two main rivals. The majority of currency analysts see only upside momentum for the U.S. Dollar and the Euro as a result.

As reported at 12:17 p.m. (JST) in Tokyo, the USD/JPY pair has continued to inch closer to the key level of 100.00 Yen, hitting a 4-year peak earlier at 99.66 Yen, just shy of that still elusive level. The EUR/JPY pair hit 129.69 Yen, a level unseen in more than three years. Commodity-linked currencies fared even better against the safe haven Yen, with the AUD/JPY pair hitting a 5-year peak at 103.70 Yen, while the NZD/JPY pair touched on its own 5-year peak of 84.32 Yen.

Over the past several days in the absence of other economic news the markets’ focus has clearly been on the Japanese Yen, but inflation data out of China which showed an unexpected fall in both consumer and producer inflation will likely draw some attention to the commodity linked currencies.