The Japanese Yen reached a record high against the dollar today in the run-up to Eurozone crunch talks. The increasing likelihood of a further round of quantitative easing in the US also added to concerns.
The Federal reserve's plans are thought to include a widespread purchase of mortgage-backed securities in an attempt to kick-start the staggering housing market.
With gold growing increasingly volatile in this last couple of weeks and the Swiss central bank pursuing its efforts to weaken the Franc, the Yen is fast becoming the only currency investors are willing to hold.
It is thought that selling the dollar is, for many, effectively a bet against a resolution to the Euro crisis, as a global recovery seems increasingly likely to be America’s greatest hope of weathering the current storm.
Eurozone leaders are unlikely to make any headway at the first meeting in Brussels so markets may have to wait as long as until Wednesday for any meaningful conclusions.
Attentions must now surely turn to the Central Bank of Japan. The strong Yen is causing companies to leave in their droves, draining millions from their economy in the process. Be it a direct market intervention in the mould of Switzerland’s intervention, or a less explicit monetary approach involving quantitative easing, Japan must act to devalue the Yen or risk another ‘lost decade’.
The Federal reserve's plans are thought to include a widespread purchase of mortgage-backed securities in an attempt to kick-start the staggering housing market.
With gold growing increasingly volatile in this last couple of weeks and the Swiss central bank pursuing its efforts to weaken the Franc, the Yen is fast becoming the only currency investors are willing to hold.
It is thought that selling the dollar is, for many, effectively a bet against a resolution to the Euro crisis, as a global recovery seems increasingly likely to be America’s greatest hope of weathering the current storm.
Eurozone leaders are unlikely to make any headway at the first meeting in Brussels so markets may have to wait as long as until Wednesday for any meaningful conclusions.
Attentions must now surely turn to the Central Bank of Japan. The strong Yen is causing companies to leave in their droves, draining millions from their economy in the process. Be it a direct market intervention in the mould of Switzerland’s intervention, or a less explicit monetary approach involving quantitative easing, Japan must act to devalue the Yen or risk another ‘lost decade’.
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