Seven points were added to EUR/JPY after it de-escalated this
week as it traded at 135.19. The euro plunged to a record low last Thursday in
a range of 1.15 prior to a bit of recovering. Taro Aso, Japan’s Minister of
Finance said last Friday that he is keeping a close eye on how other countries’
central bank policies, as the decision of Switzerland to abandon its cap
currency and sever interest rates, will influence the bond yields of Japan. He
said that he is not giving comment on what other countries are doing but he was
jolted by the decision of Swiss National Bank to abandon its currency cap that
also surprised other global financial markets.
After PM Shinzo Abe’s government increased the sales tax, Japan
plans a budget recorded for the coming year to reinforce an economy that is
likely to fall into a period of recession. The 96.34 trillion yen or $814
billion budget proposal was approved by the government ministers as well as the
ruling coalition parties that will be for 2 months to start April 1.
In the report released as of Wednesday, CB propose the inclusion of a hedge funds in the
global currency market that reach over 10% of day-to-day transaction value,
stating that data come from the Bank for International Settlements. The BOJ
stressed the importance of monitoring the effect of hedge funds. It was
observed that activity by hedge funds increased slides of the yen in middle
autumn of 2012 and the 1st half
of 2013, including the summer of 2014.
The pair will make their big move next week at the meeting of
ECB meeting on the 22nd, although its stimulus program is already
factors in currency prices.
