Fundamental Analysis
November 30, 2012 @ 9:34 pm

Yen at 7-month low versus dollar

The yen weakened to the lowest level in over seven months against the US dollar on Friday. The Japanese currency is being weighed down by on expectations for even more monetary policy easing from the Bank of Japan. Today the Japanese government announced its approval for a second stimulus package in a little more than a month.

This led USDJPY to the highest level since April, rising above 82.70 yen in the European trading session and eased slightly in the US session due to profit taking ahead of the weekend.

On the month, the dollar  is up 3.3 percent versus yen, its biggest monthly gain since February. On the year so far the dollar is up 7.2 percent against the yen.

Meanwhile, euro hit a seven-month high against the yen in the Europe trade on Friday to peak at 107.65 and is up 3.7 percent this month. The pair slid on profit taking in the US session.

Japan’s main opposition party leader, Shinzo Abe, is seen as the frontrunner to be the next prime minister of Japan after elections in the country in mid-December.

Abe has recently made comments about applying more pressure on the Bank of Japan to be more aggressive on policy easing in order to stimulate the Japanese economy. Easing usually has a weakening effect on a currency. That is why the yen is being sold off.

Related Posts Plugin for WordPress, Blogger...

No comments yet.

Leave a Reply

You must be logged in to post a comment.