By: Barbara Zigah
The Japanese Yen surged broadly in Asian trading today following the news that Chinese authorities ordered the implementation of recently established capital reserve requirements for some Chinese banks, an indication that China is making some effort to control its booming economy and stave off inflation. Not all Chinese banks were required to raise their reserve; the specifically chosen banks all bore the same characteristic excessive lending policies.
As reported at 1:19 p.m. (JST) in Tokyo, the Japanese Yen traded against the U.S. Dollar at 90.05 Yen, a decline of .3%; at one point, the greenback slipped to 89.82 Yen, well off the 90.35 Yen trade as the China bank news broke. Against the Euro, the Yen traded at 127.00 Yen, a rise of .6%; immediately following the news the Euro was trading at 126.85 Yen. According to one trader in Japan, the market is extremely volatile to any news of tightening of China’s monetary policy,
Authorities at the Bank of Japan indicated in a press release that it was imperative that Japan’s deflation be curtailed, and to that end interest rates would remain fixed at .1% for the present.
News of Chinese Monetary Policy Tightening Boosts Yen
Barbara Zigah
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About Barbara Zigah
After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.