US Hits Lowest Level Against JPY at 105.55

The U.S. dollar briefly dived to mid-105 yen on Tuesday in London, sinking to the lowest level since October 2014 as market players continued to buy the yen after Japan’s central bank kept its policy unchanged last week.

The dollar changed hands at 105.55-65 yen at 9 a.m. in London, compared with 106.36-46 yen in New York and 106.39-41 yen in Tokyo at 5 p.m. Monday.

Earlier in the day, the dollar fell below 106 yen in Oceania trading. Japanese financial markets were closed Tuesday for a national holiday.

Market players bought the yen and sold the dollar “thinking Japan would not intervene” after the United States added the country to a new foreign exchange policy monitoring list on Friday, a participant said.

The U.S. currency dropped about 6 yen in nearly one week following the Bank of Japan’s decision to hold off from further monetary easing at its recent meeting despite market expectations of additional stimulus.

Earlier in Frankfurt, BOJ chief Haruhiko Kuroda expressed caution about the yen’s appreciation, saying it could have an unfavorable impact on the Japanese economy. The remarks, however, had a limited impact amid thin trading while Tokyo markets were on holiday, dealers said.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza