Market News

The Japanese Yen fell to a multi-year low against the U.S. Dollar during the Asian trading session following new comments made by the Prime Minister who indicated that the Japanese central bank should include the maximization of employment as one of its policy goals along with its mandate to ensure price stability.

Japanese stock prices have risen approximately 20 percent in the past two months as the country’s currency has weakened consistently. The Nikkei 225 gained for a second day, rising 0.7 percent to a 10,652.64 close.

The U.S. Dollar firmed against the Japanese Yen during the Asian trading session after a fall from a 2½-year peak encouraged traders to buy the greenback on the dip.

The Euro steadied versus the Japanese Yen during the Asian trading session regrouping from the earlier struck low following comments made by Japan’s Finance Minister who said that the country would purchase the Eurozone’s bailout fund bonds which were issued by the European Stability Mechanism.

The yen rallied from a 2 1/2 year low against the dollar on Monday. The yen’s relative strength index versus the dollar slid to 15.5 on Jan. 4, the least since December 2001 and below the 30 level that traders view as a signal that an asset’s price has fallen too fast.

The U.S. Dollar continued to edge higher against the Japanese Yen during the Asian trading session, striking a 2½-year high at one point, while the Euro also steadied against the Yen as investors await further stimulus measures from Japan’s central bank.

During the Asian trading session the Euro moved lower against the U.S. Dollar, coming down off a 2-week peak set yesterday after an improvement in risk on sentiment after markets learned of the U.S. avoidance of the fiscal cliff.

The U.S. Dollar edged lower during the Asian trading session as it appears that a last minute agreement between President Obama and the U.S. House of Representatives might at last be on the horizon.

In a deal approved just before 2am EST on New Year’s day, members of Congress have reached a deal with United States President Barack Obama to delay the imminent spending cuts and avoid much of the $600 billion in tax hikes for the next two months.

According to currency analysts, the Japanese Yen is poised to fall to a level not seen in more than seven years as investors await the Bank of Japan’s move to an extremely aggressive monetary posture in accordance with the demands of the new Japanese government headed by Shinzo Abe.

The Japanese Yen’s broad downward fall continued during Friday’s trading session in Asia as the U.S. Dollar edged lower on market players’ speculation that the fiscal cliff problem won’t be resolved in time to avoid billions of dollars worth of spending cuts and tax increases.

The Japanese Yen struck a 2-year trough against the U.S. Dollar during the Asian trading session on expectations that Abe Shinzo’s new government will implement a new and more aggressive stimulus policy, an action which is certain to further depreciate the safe haven Japanese currency.

Although it may seem like nearly everyone in the world is vacationing or enjoying a bit of winter relaxation, such luxury has eluded President Barack Obama, who was forced to shorten his Hawaiian vacation to deal with issues relating to the “fiscal cliff”

US consumer confidence fell to a five-month low in December. Meanwhile, in Japan, a new prime minister is set to shake things up. Get the story here.

The Japanese Yen continues to fall in the wake of this month’s election of a new government which is intent on ensuring that the Japanese economy recovers more quickly than it has done in the past.