Yen Declines on Outlook for Continuing Monetary Accommodation

The Japanese yen fell today on outlook for continuing accommodation from the Bank of Japan that will push the currency to the downside. Weaker currency is one of the aims of the central bank that should support economic recovery.

BoJ board member Ryuzo Miyao said that the central bank has taken all necessary steps to facilitate economic growth. He noted that the monetary policy will continue to put “downward pressure on rates” and ”strongly support economic recovery”.

Truth be told, fundamentals did not support outlook for improving economy. The Corporate Services Price Index fell 0.4 percent in April from a year ago, compared to the predicted drop of 0.2 percent. Meanwhile, analysts believe that the BoJ will have hard time to ease monetary policy further, making additional stimulus unlikely.

USD/JPY went up from 100.94 to 102.26 as of 21:21 GMT today. EUR/JPY climbed from 130.49 to 131.46 and GBP/JPY surged from 152.39 to 153.78.