Stock Market Watch

Forex Market Update: U.S. dollar Falls Sharply against Yen

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The U.S. dollar traded sharply lower against the yen on Friday after the Bank of Japan (BOJ) upheld its monetary policy and predicted week inflation ahead, raising doubts over the efficacy of ongoing economic stimulating measures.

However, the dollar could trade broadly higher later during the day should the U.S.’s first quarter GDP data indicates that the economy picked up the momentum after crawling in the previous quarter. According to Reuters, economists are expecting the preliminary reading to show a 3% annualized GDP growth. In the fourth quarter of 2012, the GDP rose by mere 0.4% annualized rate.

At around 8:30 a.m. EST, the dollar slumped 0.75% against the yen to trade at 98.51 yen.

BOJ’s new elected governor, Haruhiko Kuroda said that none of the board members favored more monetary easing even as the central bank reiterated its pledge to increase cash, deposits by 60 to 70 trillion yen, annually.

On April 11, the U.S. dollar climbed to a four-year high against the yen to trade at yen 99.95 after the BOJ launched its most aggressive economic stimulating measures to pull the country out of deflation.

Market participants also said that dollar’s persistent failure to breach yen 100 mark also resulted in the pull back.

“The failure at 100 yen has focused people’s minds on whether they may have been too optimistic on the near-term prospects for the yen,” said Jane Foley, a senior currency strategist at  Rabobank, according to Reuters.

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edliston
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.

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.

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