21 Nov 2013
USD/JPY breaks above 101 for the first time in 4 months
FXstreet.com (London) - The yen broke above JPY101 against the dollar today for the first time since July.
The pair has retraced after breaking to JPY101.0700, but it currently at JPY100.9150, up 0.875 percent on the day.
The big rally in the pair comes on diverging central bank monetary policy expectations. This morning the Bank of Japan kept its policy unchanged and remains committed to ultra-loose monetary policy as it fights deflationary pressures. It is expected that the Japanese central bank will maintain its loose policies until 2015 at the earliest.
Market expectations are that the BoJ will further step up its aggressive interventionist measures in the second quarter of next year, following the planned hike in the sales tax.
In contrast, the minutes from the US Federal Reserve’s October meeting released yesterday struck a surprisingly hawkish tone. The minutes indicated that the Fed would be prepared to taper its USD85bn-a-month asset purchase programme “in coming months” if the economy improves as projected.
The pair has retraced after breaking to JPY101.0700, but it currently at JPY100.9150, up 0.875 percent on the day.
The big rally in the pair comes on diverging central bank monetary policy expectations. This morning the Bank of Japan kept its policy unchanged and remains committed to ultra-loose monetary policy as it fights deflationary pressures. It is expected that the Japanese central bank will maintain its loose policies until 2015 at the earliest.
Market expectations are that the BoJ will further step up its aggressive interventionist measures in the second quarter of next year, following the planned hike in the sales tax.
In contrast, the minutes from the US Federal Reserve’s October meeting released yesterday struck a surprisingly hawkish tone. The minutes indicated that the Fed would be prepared to taper its USD85bn-a-month asset purchase programme “in coming months” if the economy improves as projected.