Earlier in the Asian trading session, the Japanese Yen struck a 7-month trough against the U.S. Dollar on investors’ expectations that the central government will cede to wishes by the new Japanese government to even more aggressively loosen their monetary policy in order to provide a lift to the Japanese economy.
As reported at 1:24 p.m. (JST) in Tokyo, on the EBS trading platform the USD/JPY pair had traded at a high of 81.59 Japanese Yen, a level not seen since late April. More recently, the pair was trading at 81.23 Japanese Yen, slipping 0.2% from Friday’s late trade in New York.
Investors have been selling off their holdings in the safe haven currency as the current government established new election for mid-December; the opposition party, which has been vocal about what they believe the central bank’s direction should be, is expected to win the election on December 16, after which analysts expect to see benchmark rates fall even below their current low levels. The mid-term outlook is quite fragile say some analysts, with the fall for the pair too far and too fast just in the past week alone; last week the pair lost 2.4% of its value, the largest single week’s percentile fall in nine months.
Fragile Outlook for Japanese Yen
Barbara Zigah