The Japanese Yen managed to hold steady against the US Dollar in Tuesday trading and keeping the recent gains following yet another policy speech from a Bank of Japan official. The remarks made by deputy governor of the BOJ were markedly similar to those of Governor Kuroda. Hiroshi Nakaso said that the BOJ would continue to pursue the QE program but would maintain a proper balance between the impacts of the plan and the likely adverse effects. Earlier this week, Governor Kuroda had specifically pointed out that the BOJ acknowledged there were adverse costs to QE.
As reported at 10:51 am (BST) in London, the USD/JPY pair was trading at 101.585 Yen, down 0.10%; the pair had earlier hit a peak of 101.90 Yen and a session low of 101.39 Yen. The Yen stumbled against other currencies, however, with the EUR/JPY higher at 114.6136 Yen, up 0.26% while the AUD/JPY was at 78.453 Yen, up 0.52%.
BOJ Outlook Unwavering
Analysts say that given the similarities, FX traders are unlikely to find any significant change in the BOJ’s outlook for the Japanese economy or the Yen. One currency strategist says that although the BOJ is insisting it will continue to use QE as a tool, it is likely approaching the limits of its usefulness and there is no real reason to believe that even more QE could provoke a sustainably lower Yen.