USD/JPY Hits Six Year High as Further Gains Expected
The last week saw a significant rise in the USD/JPY paring. It opened on Monday at 105.11 and rose steadily all week to close at 107.34 on Friday. This was the pair’s highest level in just over six years and it came as expectations that the Federal Reserve is moving closer to raising interest rates led to higher investor demand for the dollar.
The Japanese Central Bank is expected to stick to a looser monetary policy than the Federal Reserve. Furthermore, the Yen remained under pressure after the Governor of the Bank of Japan said that the bank is prepared to loosen monetary policy if its target of 2% inflation becomes difficult to meet.
It is expected that the Yen will continue to weaken over the coming week, especially as data just released shows that Japans Q2 economic contraction was larger than expected, which means that this pair could yet reach new highs.