The Yen was down once again in Asian market. The traders fetched 86.39 yen against US dollar as it rose to one point and it is considered as the highest rise since 2010. Yesterday in New York it was on the higher side and was up from the previous value of 86.09 yen. The Euro too rose against the Yen. Everyone is buying cautiously and the sense of overheating is less. There was an overheating period that prevailed in the market when dollar and yen pair surged earlier this year.
Recent data shows that the factory output was down by 1.7 percent in November. This sharp decline in the output has presented an uphill task for the government to revive the economy. The Japanese economy has been badly affected by yen’s downward movement in the market and also by economic slowdown around the world and in various European markets.
Opinions of Market Analysts
Forex traders are optimistic about new reforms of Japanese government. They are predicting that government will put more pressure on central bank to take steps in order to boost the economy. The new government will ask the central bank to set an inflation target to check deflation and the inflation target will be around two percent. More easing measures will be taken by the newly elected government to stop the fall of yen in the Asian market. Forex traders are keeping their eye on the developments of US markets and they are also looking forward to lawmakers who will take serious steps to stop tax hikes. The yen is down by 12 percent against US dollar in this financial year and some analysts predict that dollar to move towards the 90 mark.
It is expected that the range of dollar will be between 80 to 90 yen in 2013, which is higher than the previous year. Traders assume that this will continue till the forthcoming elections in July. Most of them are expecting a change in political and economical condition in Japan which will attract more foreign investments and the foreign money flow will increase to stabilize the condition. US is also keeping a close watch on the market as president and vice president will meet the leaders and try to negotiate to cut down tax hikes and also to check spending cuts. Traders are hoping that the change in the US economical strategies will be beneficial for their currency.