BOJ actions cause yen to drop
- Last Updated on 15 February 2012
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The Bank of Japan (BOJ) surprised many investors yesterday, after it announced that it was increasing its asset-buying program by 10 trillion yen. The move caused the yen to tumble throughout the day. The BOJ has often moved in to weaken the value of the yen in order to boost Japan's export driven economy. As a result of the move, the USD/JPY shot up close to 100 pips throughout the European session. Meanwhile, the EUR/JPY, despite falling the previous night, was able to rebound and cross the 103.00 level.
Turning to today, traders will want to monitor any euro-zone developments for signs of investor risk appetite. Should positive Greek news be released, the yen could see some losses as riskier currencies are likely to move up. At the same time, even if Greece receives a bailout package, it is still not entirely certain that the money will be enough for the debt-strapped country. If investors continue to think that Greece could still default on its debt, safe-haven currencies like the yen may see a boost.