Flash: USD performance vs JPY fueled by BoJ - BTMU

FXstreet.com (Barcelona) - FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the dollar performed best versus the rong>yen in 2013 fuelled mainly by the aggressive monetary policy easing by the BOJ.

Key Quotes

“With the extent of BOJ easing already unprecedented, the gains for the dollar versus the yen this year will be much more modest and the dynamic fuelling these gains is likely to shift more from being specifically a yen story to one more related to the dollar.”

“Still, the authorities in Japan are likely to keep the peddle to the floor in pursuing its aggressive easing stance. Indeed, BOJ Governor Kuroda in an interview in the Yomuiri shimbun yesterday emphasised that there would be no defined end to its easing stance and that if the 2% inflation goal was not met then the QQE program would extend beyond the end of the year.”

“The current stance only lays out an asset purchase plan through to the end of this year with the goal to double the monetary base to JPY 270trn. However, the comment from Governor Kuroda yesterday is a clear indication that the rong>BOJ policy stance is effectively open-ended. This fact along with the prospect for additional easing will ensure solid support for USD/JPY this year.”