According to the renowned lenders such as UBS AG and Morgan Stanley, the major currency of Japan, Yen is all set to decline further and it may actually go to 100 Yen per Dollar zone over the next few months. In the last meeting of Group of 20 countries, Japan has not been singled out for making policies for weakening the currency and hence, Yen may go down in future as well. Incidentally, Yen is the worst performing major currency in the last 6 month’s timeframe.
The meeting was held on last weekend in Moscow and in the end, it made a pledge to separate countries for not manipulating the exchange rates for competitive purposes. Incidentally, the Treasury Undersecretary of US, Lael Brainard stated that policy makers should refrain from making loose comments which can impact the currencies, during the meeting. Though he did not take any direct name, according to many, he tried to point out to Japan.
Japanese policy makers have constantly denied any effort for pulling down the currency. They even stated as they are trying to revive the economy of Japan, the decline comes as a byproduct. They have even questioned the rights of various other countries to point out to their specific economic policy. Recently, the Prime Minister of Japan, Shinzo Abe has put pressure on the Central Bank yet again for stepping up the stimulus.
Yen is currently at 93.50 per USD and over the last 6 months, it has tumbled by 16%. According to the analysts of Morgan Stanley, as the Group of 20 countries has not taken a strong stance against the currency manipulations, the major currency trends should start again. Policy makers from all over the world will now make manipulations as they need to and then claim that everything has been done under the guidelines set by the authority.
As the Group of 20 meeting has ended now, the focus shifts to the Governor position of the Bank of Japan. The current Governor Masaaki Shirakawa is going to step down from his position on 19th March and according to many analysts, the first choice of Abe is the current president of Asian Development Bank, Haruhiko Kuroda. However, some predict that the former Deputy Governor of Bank of Japan, Toshiro Muto may also be appointed as the new Governor.