By: Barbara Zigah
Surprise comments made by Yukio Hatoyama, the Prime Minister for Japan, which suggested that a weak Japanese Yen was not in line with the country’s frail economy, sent the Japanese currency falling against both the U.S. Dollar and the single currency Euro in Asian trading today. Hatoyama further commented that the Japanese administration would undertake firm measures to deal with the issue of the Yen’s strength. Market players said that the expectation that the Bank of Japan would further ease the current monetary policy weighed heavily on the Yen.
As reported at 1:50 p.m. (JST) in Tokyo, the Japanese Yen traded against the U.S. Dollar at 90.62 Yen; yesterday’s late New York trading was at 90.56 Yen. Versus the Euro, the Yen traded at 124.05 Yen, up from 123.86 Yen yesterday.
Despite market speculation, some dealers remain skeptical that the Japanese currency will continue its decline, at least in the near term, given that U.S. Dollar sell orders are in place from exporters to sell above 91.00 Yen. The Euro is also not expected to rise above 124.50 Yen, based on the continuing Greek fiscal uncertainty which has severely dented investor confidence.