Strength Of The Yen Causing Concern For Japanese Government
In recent weeks the Japanese yen has pushed its way up and above the expectations of many forex traders at trading sites such as CMC Markets and eToro. But the unexpected and continuing strength of the Yen is causing concern for the Japanese Government. In a statement made on Wednesday by the Japanese Prime Minister, Yukio Hatoyama, he said that the continuing strength of the yen “can’t be left as it is”, prompting speculation that Japan may take measures to undermine the yen’s strength.
For months many foreign exchange traders have profited by the continuing climb of the yen against many pairs. But due to the threat of deflation the Bank of Japan may call in the assistance of Japan’s Ministry of Finance to intervene in the currency markets for the first time since 2004 in the hope of resisting an economic downturn.
Even in the light of such roaring strength on behalf of the yen the Japanese Government have been reluctant to intervene, unlike the Swiss Government. The Swiss National Bank has demonstrated its unwillingness to allow the strength of the Swiss franc to escalate through a series of verbal and physical interventions in the currency market. Like the Japanese, the US Government has been happy to see the strength of the US dollar rise, stating that a strong dollar is desirable as it encourages the dollar to be used as a funding currency.
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