Tuesday saw the Japanese yen advance against the U.S. dollar for a second-straight trading session, pushing higher from its lowest level since July 2010, Bloomberg reports.
Reuters reports the monetary unit of the globe's third-largest economy moved higher despite Finance Minister Taro Aso stating the country he serves will purchase debt from the euro zone's permanent bailout fund, the European Stability Mechanism.
Policy makers with the Bank of Japan are slated to meet for two days on January 21 and 22. The most recent BOJ meeting, which was in December, saw the body enhance stimulus but back off temptations to boost the inflation goal from 1 percent.
"Yen weakness is likely to remain intact until the next BOJ meeting," foreign exchange strategist Yuki Sakasai with Barclays Plc in New York told Bloomberg on Monday. "Investors may be looking to buy the dollar-yen on dips."
Strategists said the primary reason why the commitment to purchase euro zone debt had little impact on the value of the yen is Japan bought the debt with its foreign reserves.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
