JPY/USD weakens to its lowest level since May 2009

Published: 10 Apr at 6 PM Tags: Euro, Dollar, America, Eurozone, USA, France, Japan,

The Japanese Yen has weakened to its lowest level since May 2009 against the US Dollar after the Bank of Japan reinforced its stimulus programme and as officials in the US pushed for pulling back on bond purchases.

The currency is edging ever closer to the 100 mark and is expected to breach it in the near future. Investors are seeking a sense of what more could be in store for the markets after BOJ governor Haruhiko Kuroda last week unveiled plans for the BOJ to double its bond purchases.

Rumours are circulating that Japanese investors have already turned their attention overseas as they search for higher returns. As a result the Euro has been supported despite the region posted another set of disappointing economic data. Spain continues to be mired in recession and has the second highest unemployment rate in Europe with a staggering 26% of the population unable to find work.

Elsewhere in France, industrial output showed signs of a slight recovery as it rose more than economists had been expecting. The increase in output was helped by increased production from car and aircraft factories and was also aided by the reopening of a refinery. The overall outlook however still remains dismal for the country.

The Euro rose for a fifth day against the yen amid speculation the expansion of quantitative easing in Japan will encourage funds in the nation to seek greater returns abroad.

“The Euro is being supported by anticipation of Japanese investors being encouraged to move towards riskier assets such as higher-yielding euro-zone debt,” Bank of Tokyo-Mitsubishi’s Hardman said.

Many market participants were sceptical however, as Japanese institutional investors are notoriously cautious, and said the flows were more likely driven by speculators buying in anticipation of their arrival.

As of Wednesday, 10th April 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1727, GBP USD exchange rate was 1.5323, and GBP JPY exchange rate was 152.8993.

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