Market News

Following the Bank of Japan’s stimulus announcement yesterday, the Yen slipped off a 1-week high versus the U.S. Dollar, largely attributed to an increase in investors’ risk appetite.

The Japanese Yen strayed close to a 4-month trough against the U.S. Dollar as a Bank of Japan monetary decision looms, and there is near certainty among traders that the Bank of Japan will provide more stimulus.

The Japanese Yen began the trading week lower, with investors holding the Yen in check until after the Bank of Japan announces its monetary policy decision tomorrow which is widely believed to include additional easing measures to ensure that the 1% inflation target is met.

The Japanese Yen got some respite during the Asian trading session though investors remain convinced that the safe haven currency is due for a significant fall with the Bank of Japan’s policy meeting ahead next week.

The U.S. Dollar moved higher against the Japanese Yen during the Asian trading session, with speculation still high that the Bank of Japan will intervene in the currency’s appreciation.

The Euro slipped broadly in the Asian trading session, striking a 1-week trough against the U.S. Dollar as risk appetite waned on worries over the global growth slowdown coupled with a rise in Spanish borrowing costs following the ratings downgrade of Spain’s five regions.

During the Asian trading session, the Japanese Yen struck multi-month lows against the U.S. Dollar and single currency Euro on investor speculation that the Bank of Japan is prepared to intercede in the Japanese currency’s strong appreciation.

Last Friday, inflation data from Canada showed a mild 1.2% prompting investors to speculate that the Canadian central bank will likely consider an interest rate cut later this week.

There was little change in the Euro which again held close and just below the recently struck 1-month high; analysts say that fresh impetus will be needed to retest the September peak, though it is unlikely to find it today even with the conclusion of the E.U.

The Euro held close to the 1-month peak struck on Wednesday and risk sentiment got a boost from a drop in Spain’s bond yields, better than expected housing data from the U.S. and a possible year-end rebound in the Chinese economy.

The Euro earlier struck a 1-month peak against the U.S. Dollar following Moody’s affirmation of Spain’s credit rating, instead of the downgrade into junk status that had been expected.

The U.S. Dollar held near to a 1-week high versus the Yen during the Asian trading session today; see why here.

As the week begins the Euro remains under pressure and dipped lower against the USD as market players insist on getting some clarity in the Spain bailout situation.

The Euro snapped a 3-day losing streak on Thursday and continues to edge higher during the Asian trading session after the International Monetary Fund supported the efforts of fiscally troubled Eurozone nations which has requested additional time to meet Troika-imposed targets.

The Euro continues to downtrend as Spain’s fiscal problems continue to plague investors who are concerned about the country’s bailout prospects. Follow the story on DailyForex.com.