Bank of Japan Move Disappoints, Yen Moves Higher (FXY)

An effort by the Bank of Japan to ease recent appreciation of the Yen disappointed markets Tuesday, and the Yen rose against the dollar. The CurrencyShares Japanese Yen Trust

is up 0.55% today, to $117.75. On Monday, the Bank of Japan expanded a lending facility from 20 million Yen to 30 million Yen. The move came up short of market expectations, as investors expected a more drastic move. "The policy action by the BoJ isn't going to change the market's mood. It would probably take intervention to shake things up a bit," Vassili Serebriakov, currency strategist at Wells Fargo in New York told Reuters. "But we're not even sure that would cause a sustained reversal of yen strength." The dollar fell to 84.04 Yen in late morning trade. The 15-year low is 83.58, reached last week. Sacha Tihanyi, currency strategist at Scotia Capital in Toronto, expressed hesitation about the BoJ move to Reuters. "These measures seem more suited to dealing with the negative economic effects of yen strength, rather than directly addressing the currency, suggesting more than a little hesitation in meeting the issue head-on at current dollar/yen valuations."