The Japanese Yen gained nearly 3% versus the US Dollar and the common currency Euro after Japan’s central bank surprised investors by standing pat on policy. Analysts and experts had been forecasting that the Bank of Japan was likely to ease further given the still precarious economic situation and the continuous appreciation of the Yen. The Yen saw its largest single day’s gains in five years versus the Euro. Against the greenback the Yen’s single day’s rise was only the largest in about a year, but that was likely also due to the diminished odds of an imminent hike in US interest rates.
As reported at 10:46 am (BST) in London, the USD/JPY pair was trading at 108.0995 Yen, down 3.07%; the pair has ranged from a session low of 107.9100 to a peak of 111.8900 Yen. The EUR/JPY was also lower at 122.8455 Yen, down 2.73%; today’s trading band ranged from 122.5350 Yen to 126.4746 Yen.
Yen’s Rise Unsustainable
Despite today’s broad rise, analysts remain wary of the sustainability of the Yen. Given the economic situation there and the inability for inflation to even approach the BOJ’s target of 2%, the central bank may have little choice but to intervene if the Yen continues to rise. Some analysts are putting an intervention bulls eye at the 100 Yen per dollar level.