Yen Firms on Policy Uncertainty

The Japanese Yen firmed against its major rivals, with the rise attributed to investor uncertainty as to how the Japanese government will move forward with what had been clearly viewed as an aggressively loose monetary policy now that there are signs of dissension among officials, including a delay in the naming of the next Bank of Japan governor. Currency strategists also believe that the G20 members’ commitment on competitive devaluations will also likely play into the short term appreciation of the currency.

As reported at 1:57 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 93.55 Yen, a loss of 0.1% for the greenback and well off 94.465 Yen, the 33-month peak which had been struck earlier this month. Analysts foresee the pair trading within a trading band of about 92.50 Yen to 95.50 Yen over the course of the next several weeks.

Also in Asia, the New Zealand Dollar fell hard against the U.S. Dollar following comments made by Graeme Wheeler, the Reserve Bank of New Zealand governor who said that the Kiwi, as the New Zealand Dollar is sometimes called, is significantly overvalued relative to the country’s economic fundamentals. The NZD/USD pair was trading at $0.8404, a loss of 0.8%; only last Friday the pair had traded at $0.8534, price unseen in more than 17-months.