Advertisement
ForexTV | October 31 2011 12:43 EDT
ForexTV.com (New York) by Timothy Kelly
After reaching another all-time low of 75.31 the BOJ unilaterally intervened in the currency markets to stem the rise of the Yen. This marks the third official intervention this year by Japanese officials to influence the value of the currency.
Finance Minister Jun Azumi confirmed that Japan had indeed intervened in the currency market today to weaken the currency. Azumi make a statement earlier today that he’s ready to take “determined” steps in the currency market as necessary after the yen rose to a fresh post-World War II high against the dollar.
He told a group of reporters in Tokyo today that speculative activity is strong in the currency market, adding that the yen’s moves don’t reflect Japan’s economic fundamentals.
Previous Attempts Unsuccessful
The Bank of Japan has now made three attempts this year to weaken its currency, one of those efforts was joined by the Central Banks of the G5 nations, but all previous actions have been unsuccessful; only resulting in the Yen strengthening more than the previous levels.
Earlier in the year, Japanese officials said that 80.00 was the “line in the sand” that would be defended to stem the strengthening currency. That level was surpassed with the BOJ not choosing to defend the 80.00 level and the currency dropped to 75.31 against the US Dollar.
It is unclear whether Japan has the will and the resources to continue to weaken the Yen over a sustained period of time or whether they will get assistance from other Central Banks. Traders have been determined to speculate on the Yen strength and the Japanese government has been powerless to stop this force of the markets.
According to the Commitment of Traders report, currency speculators doubled their net long position in the yen to 54,279 contracts in the week ended October 25, the highest since the beginning of August, the latest U.S. CFTC data shows.
One thing is clear, Japan has not been successful at intervention in the past.
Forex research by ForexTV.com
Company : ForexTV, LLC
Website : http://www.forextv.com
About :
ForexTV is about money, passion and life. Focusing on trading news and data, we recognize that traders are a diverse and dynamic group of individuals. The very act of trading involves risk, fear, determination and desire. Our news coverage endeavors to match that passion.
At the heart of our business are video news reports that are gathered from multiple sources around the globe and delivered with attitude and verve. In addition, we provide live prices, text-based news and charting capabilities to traders, analysts and other participants in the global forex markets.
Our approach to news-gathering and content dissemination enables users to see a broad range of market perspective from many sides of the forex marketplace as well as the global financial marketplace.
