Forex: BoJ Keeps Heat on Yen – USD/JPY Cracks ¥91, EUR/JPY Over ¥122

Fundamental Forecast for Japanese Yen: Bearish

- Commodity Currencies Soft, Yen Reverses on Strong Chinese Data

- Yen Rallies Post-BoJ – Strength Offers Opportunities to Sell

- SSI: Japanese Yen to Fall Further

The Japanese Yen ended the week as a bottom feeder, finishing only ahead of the Canadian Dollar, while losing significant ground to several of the other majors. Just this week, the Japanese Yen lost -1.98% to the Euro, as the EURJPY finished the week at 122.32. The USDJPY was also stronger, gaining +0.90% to 90.91, as US Treasuries and JGBs diverged, with the former seeing an increase in yield, while the latter remained under pressure (the converse relationship implies that JGBs increased in price). Of course, the centerpiece story to the Yen’s demise – albeit one easily complemented by the global rush into higher yielding and riskier assets, like the S&P 500 – is that the Japanese government is aggressively pushing the Bank of Japan to implement some of the most dovish monetary policies ever implemented during the modern era during a non-crisis (a la 2008/2009) period.

This week was the first week we truly got to see the BoJ ‘walk the walk,’ with a +2.0% yearly CPI target implemented, as well as the promise of further easing (