Yen achieves three-week low
On Monday, the Japanese yen demonstrated a three-week tumble following expectations that the BOJ could get down to lending to the country’s banks at negative rates. Meanwhile, the British pound reached its five-week high, thus reacting to Obama urging the UK’s citizens not to leave the EU.
During early trade, the yen tumbled to 111.90 – the lowest value for three weeks. However, Japanese exporters rushed to purchase the country’s currency, thus bringing it back to 111.17.
Friday’s tumble was probably caused by the BOJ’s recent statement, unveiling its readiness to apply negative rates to its lending program for the country’s financial institutions.
Another probable reason of that descend was selling carried out by speculators who had held considerable amounts of yen in their long positions. Friday’s data disclosed that last week currency traders were holding a record yen long positions in the Chicago futures exchange.
By the way, traders worry that the BOJ might have rather a limited impact on the yen’s weakening after the introduction of negative interest rates.