Stock Market Watch

Forex Market Update: Yen and Euro Fall Sharply against Dollar

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The yen fell sharply against all major traded currencies on Thursday after the Bank of Japan (BOJ), in line with expectations, announced series of unprecedented monetary easing measures, in order to stimulate stagnating economy and reach its new inflation target of 2% in next two years.

Concluding its two-day policy rate meeting on Thursday the BOJ, announced following measures:  Kick-starting a new phase of monetary easing both in terms of quantity and quality, doubling the monetary base and the amounts outstanding of Japanese government bonds (JGBs) as well as exchange-traded funds (ETFs) in two years and more than double the average remaining maturity of JGB purchases, according to the Wall Street Journal.

Following the announcement of extremely dovish policy rate statement, the yen tumbled 2.5 percent against the USD in Asian trading hours to around yen 95.40 – its biggest daily plunge against the greenback since October 2011 – and slumped by 2.1 percent against the euro to around yen 122.

However, the Nikkei 225 Index jumped 2.2% even as yields on Japanese bond yields fell to its record levels.

Meanwhile, the euro slumped 0.74% to trade at 1.2754 by 8:45 EST, following the release of yet another dismal economic data from the currency bloc.

While private sector activities in the euro zone contracted in March to 46.4 from 47.9 in February, the currency bloc’s composite PMI fell to 46.5 in March from 47.9 in February, according to Markit.

However, the biggest causes for concern were Germany’s Composite PMI, which fell to 3-month low and French composite PMI, which  was weakest in last 48 months.

 

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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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