Week in FX Asia – Yen Continues Fall as G20 Issues no Objection to Japan

This week’s G20 meeting in Washington saw the Japanese currency discussed at length and with anticipation given the comments about the yen’s decline. The world’s largest 20 economies were satisfied with the explanation from the Bank of Japan that its measures were not aimed at weakening the currency, but rather at boosting growth and price stability. The yen has dropped 20% in value since the measures were implemented.

Next Thursday the Consumer Price Index in Japan will be reported and will give further insights into how the measures have affected the direct goal of price stability and 2% inflation set by PM Shinzo Abe. The best argument from the BoJ was reiterating that the measures complied with those agreed in the previous G20 meeting.

The currency is near the 100 yen per dollar level which has proven resilient but it is now closer to breaking above after the IMF and finance ministers from the largest economies have shown their support to the current Japanese policies. Before the G20 there were criticisms aimed at the yen’s decline mostly from emerging markets whose currencies were negatively affected as their exports will suffer a disadvantage. The current economic environment still classifies the Japanese policies as domestic measures and in no means an act of “currency war”.

• Japan and China Helping Asian Currencies
• G–20′s Reaction to the Yen’s Fall
• A Change in China’s Currency Policy Likely
• CNY 1% Trading Limit May Change Next Week
• Japan Posts Record Trade Deficit
• China’s Home Prices Post Solid Gains
• CIC: China Will Grow at Sustainable Levels
• No Concerns Over Chinese Economy
• Auditor: China Local Authority Debt ‘Out of Control’
• Bank of Japan Governor Tells Parliament to Curb Spending and Increase Revenue
• Commodities Plunge Sees China’s Stocks Drop to Three-Month Low
• BOJ Boosts Economy but Draghi Doesn’t See Currency War
• South Korea Unveils Fiscal Measures of 17.3 Trillion Won (US$15.4 billion)
• China Growth Falls in First Quarter
• Singapore Home Sales Growing Again
• A Loss of Confidence in China’s Outlook
• World Bank: East Asia Should Consider Reining in Stimulus
• World Bank Cuts China Estimate
• China’s Q1 GDP Growth Slows to 7.7%
• Yuan Climbs to 19-Year High with USD/CNY Near 6.2450

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