The US Dollar edged higher versus the Japanese Yen, finding support after a member of Japan’s academia suggested that the Bank of Japan could expand Quantitative Easing measures by next month. Takatoshi Ito is considered a very prominent figure in Japan’s academic world and holds very close ties to Haruhiko Kuroda, the Governor of the BOJ. Kuroda, himself has pointed out that he would take necessary measures given that large downside risks remain to Japan’s economy. Moreover, some traders who used the last bounce to sell off the greenback appear to now be on the buy side of the equation.
As reported at 10:35 am (BST) in London, the USD/JPY was trading at 109.0780 Yen, a gain of 0.78%; the pair ranged from a session low of 108.2350 Yen to a high of 109.0795 Yen. Yesterday, the greenback fell some 0.8% after hitting a 2-week peak at 109.38 Yen. Currently, the EUR/JPY is also higher at 124.5140 Yen, a gain of 0.46%.
Intervention Still a Concern
The threat of an intervention in the Yen’s rise has tended to help the US Dollar and curb the Yen’s enthusiasm. Despite the intervention rhetoric from the Japanese government, with the G7 looming large, analysts feel that the BOJ will be wary of interfering given the possible backlash from the other member countries. Tokyo could try to build up some consensus domestically and internationally before making any move against the Yen’s rise.
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