The Japanese Yen eased away from the recently struck 7-year trough versus the U.S. Dollar in the wake of comments made by a government official which cooled investor speculation that the Japanese Prime Minister would be holding a snap election next month. The Japanese currency has been under increased pressure as expectations that Shinzo Abe will make the decision to delay the implementation of another sales tax increase and at the same time announce upcoming elections. Analysts believe if he does call for an election and if he does once again win, that more policies to stimulate the economy are likely on the way.
As reported at 8:53 a.m. (GMT) in London, the USD/JPY was trading at 115.35 Yen, retreating from Tuesday’s high of 116.11 Yen which had occurred during the Asian session. The EUR/USD meanwhile was trading lower at $1.2471 on expectations that Mario Draghi will continue to devalue the Euro through easing in an effort to stimulate the Eurozone economy.
Sterling Hit by Inflation Report
In the U.K., the Bank of England earlier released its inflation report and said that growth prospects were dimming and that inflation looked to fall in the near term. That effectively pushed back consideration of a BoE rate hike in the near term. The GBP/USD was trading lower at 1.5855, only a few pips from the session low and well away from range’s high at 1.5942.