After reaching new highs, USDJPY started a correction.
Having updated its 20-year lows against the USD, the Japanese Yen reached stability but is still looking very weak. The current quote for the instrument is 128.05.
The Yen dropped to 129.41 this week but later managed to correct a little bit and reach stability.
As the Bank of Japan Governor Haruhiko Kuroda mentioned recently, the current excessive volatility of currency rates has a negative impact on business activity. According to the BoJ, the currency rates should move steadily and reflect fundamental indicators instead of fluctuations in the market sentiment. The Japanese regulator intends to continue monitoring the impact of currency fluctuations on the country’s economy and pricing environment.
The Ministry of Finance of Japan is very worried about the current situation with currency rates. The sudden devaluation of the Yen raises questions and makes market players think about how it might influence the economic indicators in the future. Sharp fluctuations of currencies are unacceptable – this is the Ministry’s official stance.
None of the Japanese monetary policymakers offers any possible scenarios of the Yen weakening. It is believed that due to the massive attack of the “greenback” and the difference in interest rates, the “carry trade” strategy and the JPY weakening will remain in effect for a while. It means that the Yen may hit new lows after a short break.
