Yen Down By Most in 17 Months

The Bank of Japan (BOJ) earlier announced much larger than expected stimulus measures. These tend to devalue the Yen and so the currency slumped by the most in 17 months against the Dollar.

The Yen was down by 2.1% as against all of its 16 major peers after the BOJ Governor, announced a doubling of monthly bond purchases. They also have adopted a 2 year period in which to achieve their 2% annual inflation target.

 

Japan's central bank announced that it will purchase 7 trillion Yen of bonds a month. This exceeds a 5.2 trillion Yen previous estimate by most economists.

The BOJ officials also suspended a cap on some bond holdings and dropped a limit on debt maturities.

Under the BOJ's new leadership, the Yen has been driven down by 11% so far in 2013 on expectations for expanded monetary easing.

 

With the latest developments, it's apparent that currently the Yen is under pressure and will most likely weaken even further in the short term.

Earlier the Yen had slid by 2.6% to 95.43 per Dollar, its biggest one day drop in 17 Months. It dropped by 2.4% to 122.36 per Euro while the Euro lost 0.2% to $1.2819.

The Euro had halted a gain against the Dollar ahead of a gathering by European Central Bank (ECB) officials today for a policy meeting that most economists expect will result in interest rates remaining at a record low 0.75%.

The Pound dropped 0.4% to $1.5065 and declined 0.2% to 85.09 pence per Euro ahead of the Bank of England (BOE) announcing its policy decision today.