Forex Market Update: Yen Rises Against Dollar and Euro
The Japanese yen edged higher against the U.S. dollar and the euro on Tuesday following comments from Japan’s Finance Minister. The dollar, meanwhile, slipped against the euro.
The Japanese currency rose after Taro Aso, Japan’s Finance Minister, said that he was not considering buying foreign bonds. Aso’s comments came a day after Japanese Prime Minister, Shinzo Abe, said that buying foreign bonds was an option as part of the Bank of Japan’s (BOJ) efforts to ease monetary policy.
This is not the first time Aso and Abe have given conflicting views on the Japanese monetary policy. While Abe has been pressing the BOJ to implement further easing measures to boost economic growth and fight deflation, Aso has shown concerns over a sharp fall in the yen.
Speaking to Reuters, Omer Esiner, Chief Market Analyst at Commonwealth Foreign Exchange in Washington DC, said that the comments from the Japanese Finance Minister suggested that there may be growing differences between him and the Prime Minister, which could threaten the pace of policy easing going forward.
The dollar slipped 0.4% to 93.53 yen on Tuesday. The euro slipped 0.1% to 125.27 yen.
The dollar, meanwhile, also weakened against the euro on Tuesday. The euro edged higher following strong German economic data. Data released on Tuesday showed that Germany’s ZEW index of analyst and investor sentiment rose in February to the highest level since April 2010. At last check, the single currency was trading 0.3% higher at 1.3391 against the greenback.
The euro had fallen sharply last week after a report showed that the euro zone economy contracted more than forecast in the fourth quarter of 2012. Last week’s GDP data also showed that French and German economy contracted in the fourth quarter.
The dollar index slipped 0.1% to 80.464 on Tuesday.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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