USD/JPY reaches peak since August 1998, passes mid-144.00s
On Wednesday, the USD/JPY pair continues its strong upward momentum, building on the previous day’s spectacular rise and gaining significant follow-through impetus. During the first half of the European session, the pair reaches a new high point not seen in the previous 24 years; it is now trading barely over the 144.00 middle point.
The sharp decline in the value of the Japanese yen continues to be a primary topic of discussion among market participants, notwithstanding the significant gap that exists between the monetary policy stance taken by the Bank of Japan and those of other major central banks. It is important to point out that the Bank of Japan has been falling behind in the process of normalizing its monetary policy and is still committed to continue with its easy monetary policy. This, in addition to a minor rebound in equities markets, weighs hard on the safe-haven JPY, which continues to drive the USD/JPY pair higher as a result of the trend.
Traders who were bullish on the market also drew cues from the Bank of Japan’s announcement that it would increase the amount of bonds it would purchase at its regular operations from 500 billion to 550 billion yen in order to maintain the benchmark 10-year yield below the maximum limit of 0.25%. In the meanwhile, purchasing throughout the day shows little sign of slowing down, in spite of the most recent verbal caution given by policymakers to avoid a rapid drop in the value of the yen.
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