Week in FX Asia – Yen Depreciation Continues as Abe Returns
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
New year, new government and a newly depreciated yen. The JPY is continuing the same trend with which it ended the year. Shinzo Abe has made it very clear that he expects the Bank of Japan to get all the weapons in the Central Bank arsenal to bring Japan out of a recession. This includes depreciating the yen, increasing inflation targets and stimulus programs.
That is only part of the equation. The USD has recovered against the yen after the Fed released its Federal Open Market Committee minutes. There have been hints throughout last year that there was a division regarding Quantitative easing and the role of the Central Bank and the latest minutes highlight that division. It seems the members are now moving more in favour of ending QE4 in 2013. Previously no date was given or even suggested so this is a big step forward if taken into consideration alongside other signs of economic recovery such as the employment numbers and manufacturing surveys.
The current levels of the yen have been a breath of fresh air for exporters as the currency has touched a 2 year high versus the USD.
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