The Bank of Japan intervened today to weaken the yen in its exchange rate with the U.S. dollar.
The Associated Press is reporting:
The dollar surged on Wednesday to its highest level against the Japanese yen in September after the Bank of Japan unexpectedly moved to weaken the yen.
By late morning in New York, the dollar had risen 3 percent in its biggest one-day gain versus the yen since the depths of the financial crisis in fall 2008.
However, some analysts say the yen's gains are likely to continue.
The yen has hit a series of 15-year highs versus the dollar since August, and has risen about 10 percent this year as investors seek refuge in the yen, which is considered a safe haven currency. The rapid rise, which hurts the profits of Japan's major exporters, has become a major issue for Japan's politicians as it threatens to undermine the recovery in the world's No. 3 economy.
After the yen's most recent peak Tuesday evening of 82.88 yen against the dollar, the Bank of Japan sold yen and bought dollars directly in the marketplace. It was the first intervention since March 2004.
The current rate of exchange (as I write this) is:
1.00 USD = 85.5752 JPY
Source: Universal Currency Converter.
This is good news for Japanese exporters as the action makes their products more competitive and it is better news for Japan tourists from America as they will get a better rate of exchange. It is still a far cry from three years ago when I got 116 yen/dollar.
To read the full article, go here.
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