- Derek Mumford, a director at Rochford Capital, foreign-exchange risk-management company
The Japanese Yen plunged against all its major peers, after the BoJ Deputy Governor Kikuo Iwata once again reiterated central bank's pledge to unprecedented monetary policy. The Yen fell 0.2% against both greenback and single currency, extending its Friday's drop. Iwata also stressed out country's monetary and fiscal policies are crucial for ending decades of deflation and saying he is confident in reaching 2% target in a planned term of two years and expressing a view, after a lag, effects of Abenomics will eventually spread across the economy, leading to a broadening recovery. Later after this the Bank of Japan is gathering to decide whether the current policy is appropriate or any adjustments are needed. However, analyst are univocal central bankers will stick to plan to continue buying more than 7 trillion yen in bonds per month to end deflation.
A research from Credit Agricole showed the ongoing recovery in the world's third largest economy may prevent an immediate need for a changes in BoJ's policy settings. Furthermore, its decision would prevent any renewed weakness of the Yen in the short term, hence Credit Agricole expects USD/JPY to track lower towards 96.0, before finding support from Yen-sellers. Meanwhile, according to Shinzo Abe, without the supportive tools, the economy would face high risks of stalling, taking into account the government would increase sales tax in April to spur finances and lower enormous public debt.
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