The Japanese Yen was mired close to a 2-month trough versus its main rival, the U.S. Dollar, following comments made by Japan’s Finance Minister who said that currency intervention must be included as one of the government’s policy tools. Though he meant at some time in the future, for investors that was close enough to a hint that the government might consider intervening in the Yen’s strength, which effectively and broadly knocked down the safe haven currency. Recent data showed that Japan’s 3rd quarter growth had slowed, which is now the second consecutive quarterly decline, leaving market players to speculate that the Bank of Japan might soon consider more stimulus.
As reported at 10:13 a.m. (JST) in Tokyo, the USD/JPY pair traded at 100.06 Yen, slipping from an overnight peak of 100.15 Yen, a level last seen two months ago; the greenback has gained nearly 1% on the Yen just this week. The Euro’s gains against the Yen were even more remarkable given that the Euro has been under pressure as a result of weak economic data from the Eurozone; for the week, the Euro was up 1.7%. The EUR/JPY pair trading at 134.59 Yen, only a few pips from yesterday’s high of 134.70 Yen.
Euro Pressure Resumes
Except against the Japanese Yen, the Euro was under pressure against its major rivals as a result of a recent data release which showed that growth in the 3rd quarter had stagnated, giving rise to investors’ speculation that the European Central Bank would keep good on its promise to provide further easing in order to stimulate growth.