Japan: Japanese yen plummets to seven-year low on further monetary easing
November 21, 2014
The Japanese yen (JPY) has been depreciating sharply against the U.S. dollar since the Bank of Japan surprisingly announced an expansion of its ultra-loose monetary policy on 31 October. On 20 November, the JPY reached a seven-year low against the greenback, trading at JPY 118.2 per USD. This was 10.5% weaker than the level observed on the same day of the previous month. On an annual basis, the Japanese yen lost 18.2% against the U.S. dollar.
The yen has tumbled in recent weeks in the wake of the Central Bank’s decision to expand its quantitative and qualitative program. The Bank is seeking to pre-empt risks of a return to Japan’s traditional “deflationary mindset.” Moreover, fresh stimulus will also help to prop up the economy after the country entered into technical recession in Q3. United States’ strong economic data is also playing a role in the depreciation of the yen.