The Japanese Yen continued to edge higher in Asian trading despite the Bank of Japan’s “threat” to meet inflation targets and the promise of more rate cuts into negative territory. Analysts say that, the bottom line is that the Bank of Japan and Governor Kuroda, have little power left to affect the desired changes, despite their convictions and commitment. They point out that the destiny of the USD/JPY pair is more likely to be influenced by the Dollar end of the equation than the Yen side at this time. To that end, markets are eyeing the upcoming presidential debate in the US between Democratic nominee Hillary Clinton and the Republican candidate, Donald Trump.
As reported at 10:48 am (BST) in London, the USD/JPY pair was trading at 100.516 Yen, down 0.54%; the pair has ranged from a session trough of 100.1000 Yen to a peak of 100.42 Yen. The EUR/JPY is trading lower at 113.0121 Yen, down 0.43%, well off the session high of 113.5100 Yen.
Speeches from Draghi and Yellen Eyed
In a relatively quiet week from an economic data standpoint, markets will likely focus on the speeches made by the heads of the European Central Bank and the US Federal Reserve. Later today, ECH chief Mario Draghi will address the European Parliament in Brussels and will speak again on Wednesday in Berlin. Markets will focus on those comments to glean hints about the future of the Euro and the Eurozone, as a whole. Janet Yellen, head of the Federal Reserve, will be testifying before the U.S. Congress. Markets are anxiously trying to gauge the timing of the next interest rate hike.