USD/JPY Exchange Continues to Rise As Dollar Strengthens
The end of last week saw further rises in the USD/JPY pairing as the dollar gained in strength. On Wednesday it jumped from 107.14 to 108.38 and then continued upwards hitting a high of 109.23 on Friday. The beginning of this week saw a slight fall but it remained above the 109 level.
Demand for the dollar is high amid indications that the US’ economic recovery is making good progress. This has led to expectations that the Federal Reserve will raise interest rates sometime next year.
In contrast the Bank of Japan looks set to stick to a looser monetary policy stance due to concerns over Japanese economy growth. Furthermore, a weak yen and strong dollar is good for Japanese trade as it results is larger profits so the Bank of Japan will try to keep it weak.