Yen Resumes Fall on G20 Silence

The Japanese Yen weakened broadly during Monday’s trading session in Asia after the expected chastisement by the G20 members of the Japanese government’s outright manipulation of the currency failed to materialize. Over the past several months, the Bank of Japan, urged on by the government, has flooded the market with Yen in an effort to devalue the currency and to reinflate the economy of Japan which has suffered extensively from a prolonged period of deflation. The G20 members said that they were committed to the pursuit of monetary policy only if said policy was intended to ensure economic growth and price stability, which the Japanese government took to mean that they had the blessing of the G20 to continue to push ongoing stimulus.

As reported at 12:56 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 94.12 Yen, a gain of 0.7% and approaching 94.47 Yen, the 33-month high struck last week; the pair was well off Friday’s low of 92.20 Yen. The EUR/JPY pair, which was recently trading at 125.35 Yen, is also swiftly approaching a recently struck 34-month peak of 127.71 Yen. Bearish traders who sat out on the sidelines for the G20 had expectations that the Japanese government would be condemned for allowing the currency to weaken to the extent that it had, but are likely to come back to in droves with the downtrend still very much intact.