By: Barbara Zigah
The U.S. Dollar rallied against the Japanese Yen, rebounding off earlier lows in Tokyo trading, following Bank of Japan intervention. As reported at 11:25 a.m. (JST) in Tokyo, the U.S. Dollar was trading against the Japanese Yen at 82.18 Yen, a gain of 0.3%. Earlier in the session, it had struck a high of 82.469 Yen on the EBS trading platform, up from the 80.60 Yen session low, and just off an historic low of 79.70 Yen, struck in 1995.
Earlier today, in an effort to stabilize the financial markets and calm investor nerves following the massive earthquake which struck Japan last week, the Japanese central bank injected some 7 trillion Japanese Yen into the money supply. According to one FX strategist, the Yen will likely remain on the backfoot with concerns of further intervention by the central bank.
Those concerns were validated by an official from the Japanese Ministry of Finance who confirmed that the government would take every action necessary to keep the Yen from strengthening too much against the greenback. Most analysts agree that the near-term direction of USD/JPY will be dependent on the likely scale and source of financing for reconstruction efforts.