Yen Declines against USD

The Yen has dropped against USD; for the first time in last 3 days. Shinzo Abe, the Prime Minister of Japan asked the Central Bank Governor Masaaki Shirakawa to double the inflation goal of Bank of Japan to 2%. Yen declined by 1% against USD and is at 87.89 per Dollar currently. Against Euro, it depreciated by 0.8% and is currently priced at 114.74 per Euro. This marks Yen’s weakest level against Euro, since 8th July, 2011.

According to Vassili Serebriakov, the Foreign-Exchange strategist of BNP Paribas SA, the investors are still biased to take the major currency of Japan lower. Vassili added that the overall markets are looking forward to the Bank of Japan and also noticing whether the inflation goal or target is set to a higher level or not. If it happens, more people will be selling Yen.

Not only against Euro or USD, Yen declined against most of its major counterparts as well. Bank of Japan officials are reportedly in continuous touch with the Japanese Government and this boosted speculation that the policy makers will boost the stimulus, thereby tending to debase Yen.

Fabian Eliasson, who is the Vice-President of Corporate Foreign Exchange Sales Department of Mizuho Financial Group, stated that Yen is expected to decrease even further from its current position. Fabian added that not only he, but many other analysts also believe that the Bank of Japan will add further stimulus in the market and therefore their support for a weaker Yen will be established.

Coming to other currencies, Mexican Peso, the major currency of Mexico and The Kiwi, New Zealand’s major currency, both increased today, thanks to the enhanced risk appetite. The Polish Zloty has also surged ahead thanks to the announcement made by Marek Belka, the Governor of Narodowy Bank Polski. Mark commented that the Central Bank of Poland is likely to put a pause in the easing cycle after reducing the interest rates for the 3rd month. The currency marked its biggest intraday jump against Dollar within the last 7 days. It has gained by 0.8% against the greenback and is currently priced at 3.117 every USD. Euro, the shared currency of the Euro region declined by 0.2% against USD and is at $1.3055 currently. The Dollar Index, however, posted increase for the 2nd straight day and touched its highest figure within the last 6 weeks.