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Forex - USD/JPY rebounds following Amari comments

Published 05/20/2013, 10:24 PM
Updated 05/20/2013, 10:25 PM
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Investing.com - The U.S. dollar rebounded against the Japanese yen during Tuesday’s Asian session after falling Monday on concerns the yen has fallen too far too fast against its major rivals.

In Asian trading Tuesday, USD/JPY rose 0.29% to 102.58 after earlier trading as high as 102.77. The pair was likely to find resistance at 103.31, Friday's high, and support at 101.83, Thursday's low.

The dollar’s Monday woes against the yen were sparked by comments from Japanese Economy Minister Akira Amari. In comments made Monday, Amari said the rapidly depreciating yen could harm the world’s third-largest economy and that it is the responsibility of the government there to prevent that from happening.

The Bank of Japan has enacted massive monetary easing measures to steer the country away from deflationary decline and more towards growth, with the yen plunging to lows against the dollar not seen since 2008.

Despite Amari’s comments, Japan may have a tough time suddenly reversing course to strengthen the yen. That strategy does not jibe with Prime Minister Shinzo Abe’s desire to get inflation to 2% and financial markets have become accustomed to the weak yen.

Still, about 50% of Japanese companies recently surveyed by Reuters believe the yen’s declines are enough. Since mid-November, the yen has plunged 23% against the dollar and 24% against the dollar. Those declines have bolstered Japanese stocks, making the market Asia’s best performer this year.

Nearly 30% of the respondents in the survey would like to see USD/JPY fall back to 95.

Elsewhere, AUD/JPY rose 0.08% to 100.44 while EUR/JPY gained 0.29% to 132.18. NZD/JPY rose 0.19% to 83.81.

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