Earlier today the Yen dropped against all of its major counterparts as investors speculated that Japan could escape censure at a Group of 20 meeting set for tomorrow. The G-20 is likely to review monetary policies that Japan has implemented in order to weaken its currency.
The Yen dropped for a second day on G-20 speculation and as a gauge of U.S. stock market volatility has fallen by the most this year. This has reduced demand for refuge assets.
Although the weaker Yen likely won't be the main topic at the G-20 meeting, once the market stabilizes, Yen depreciation is likely set to continue.
The G-20 finance ministers and central bankers will meet on Thursday and Friday. Weekend talks are also scheduled by the International Monetary Fund (IMF) and World Bank.
Interestingly IMF Chief Economist, said on Tuesday that Japan's easing policies are "appropriate" and went on to say that the impact on the Yen is "a logical consequence."
Yen weakness also resulted as there was a drop in U.S. stock market volatility.
The VIX (VIX) or The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against losses in stocks, had for instance declined by 19% yesterday.
The Yen earlier had dropped by 0.8% to 98.35 per Dollar and lost 0.8% to 129.54 per Euro. The Euro remained little changed at $1.3174.
Sterling also remained little changed 85.80 Pence per Euro from Tuesday, remaining weak ahead of the release of minutes from April's Bank of England (BoE) meeting.
The BOE is to release minutes of its meeting during which it's "quantitative easing" program of bond purchases was left unchanged at 375 billion Pounds ($576 billion).
Should it appear that the level of dissention had risen even more in favour of more easing, this could raise speculation about more BOE quantitative easing ahead of a May Inflation report, and this could weigh on Sterling in the short term.
Although the weaker Yen likely won't be the main topic at the G-20 meeting, once the market stabilizes, Yen depreciation is likely set to continue.
The G-20 finance ministers and central bankers will meet on Thursday and Friday. Weekend talks are also scheduled by the International Monetary Fund (IMF) and World Bank.
Interestingly IMF Chief Economist, said on Tuesday that Japan's easing policies are "appropriate" and went on to say that the impact on the Yen is "a logical consequence."
Yen weakness also resulted as there was a drop in U.S. stock market volatility.
The VIX (VIX) or The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against losses in stocks, had for instance declined by 19% yesterday.
The Yen earlier had dropped by 0.8% to 98.35 per Dollar and lost 0.8% to 129.54 per Euro. The Euro remained little changed at $1.3174.
Sterling also remained little changed 85.80 Pence per Euro from Tuesday, remaining weak ahead of the release of minutes from April's Bank of England (BoE) meeting.
The BOE is to release minutes of its meeting during which it's "quantitative easing" program of bond purchases was left unchanged at 375 billion Pounds ($576 billion).
Should it appear that the level of dissention had risen even more in favour of more easing, this could raise speculation about more BOE quantitative easing ahead of a May Inflation report, and this could weigh on Sterling in the short term.
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