The JPY displayed wide losses on Monday as the Bank of Japan’s policy change to expand a fixed rate fund supply scheme disappointed investors who were anticipating more aggressive measures to counter deflation.
The USD inched higher versus the JPY on Friday, approaching losses due to wariness on possible steps from Japanese authorities to ease the yen's rise.
The JPY made a comeback from a 15-year peak on the USD and a nine-year high on the EUR on Wednesday due to chances that Japanese authorities may indeed take steps such as yen-selling intervention to encourage the yen's rise.
Japanese Finance Minister Yoshihiko Noda told reporters he would respond appropriately as needed, an expression he has not previously used in his campaign to talk the currency down.
The EUR hit a nine-year low point versus the Japanese currency on Tuesday as the loss of key technical support led speculators to sell the currency in the hope of forcing stop-loss sales against both the JPY and the USD.
The EUR hovered near a 10-week peak vs the USD on Wednesday, supported by strong U.S. corporate earnings that also boosted global shares.
The EUR hovered close to a 10-week record versus the dollar on Wednesday, supported by significant U.S. corporate earnings that also boosted global shares.
The USD held steady versus the JPY on Thursday above a 15-year low hit last week, drawing some support from a media report that the Bank of Japan has begun to consider additional monetary easing steps.
The Japanese currency increased in value on Wednesday with investors citing yen purchaing by Japanese investors and exporters, while the Canadian dollar maintained its gains scored on news of a huge takeover bid by global miner BHP Billiton for Canada's Potash Corp.
The big question remains whether the Japanese authorities will further actions to curb the JPY’s rise. This lack of clarity brought the US currency to hover around a 15 year low against the Yen, weighed dow by a decrease in IS treasury yields.
The Euro, which initially headed lower for a sixth straight day, bounced back from a near one-month low against the dollar, aided by a bounce in equity markets.
A report stating that the Japanese prime minister and the head of the central bank are going to meeting to discuss ways to better cope with the JPY’s export sapping strength lead to a serious increase of the US Dollar vs the JPY on Friday.
A wave of short Dollar positions triggered by concerns over the US and global economies on Wednesday led to the USD’s biggest daily gain in nearly two years. That gain reversed itself on Thursday with the greenback declining.
The USD hovered within clear sight of a a decade and a half low against the Japanese currency on Wednesday after the Federal Reserve announced their intentions to boost a flagging economy by reinvesting money from maturing mortgage bonds into government debt.
The uncertainty over the future federal reserve decision that many are speculating will lead to further quantitative easing as a result of a slowing economy, has led to a serious USD rebound.