Excerpt from: Forex News
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| December 26, 2008 | | Slowing inflation sends yen lower in currency trading | There has been some concern in recent weeks about whether or not the Japanese government is willing to directly intervene in the FX market in order to force the yen to depreciate.
Now, however, it appears that economic forces may do that work for the Japanese government. Inflation is slowing in Japan, and the easing that the Bank of Japan had done with monetary policy seems to be working. Bloomberg reports on how things are settling down in currency trading:
“Panicked buying of the yen has come to an end,” said
Mitsuru Sahara, senior currency sales manager at Bank of Tokyo-
Mitsubishi UFJ Ltd., a unit of Japan’s biggest lender by assets.
“The BOJ has done what it can do in response to a global
downturn and has effectively adopted a quantitative-easing
policy.”
It is possible, though, that recent volatility could return again to the FX market, and that could spur more yen buying on panic, rendering efforts by the Bank of Japan useless.
| Topic Tags: currency trading, currency trading FX market, economy, forex trading, FX market, inflation, Japanese yen | |
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