Although the main event of this year, market participants is the reduction of the US currency, but it can overshadow the yen against the background of a tightening of monetary policy around the world.
Now everyone expects the Bank of Japan interest rate decision, which will be known only tomorrow. Most likely, the regulator will stick to soft rhetoric, although in other developed economies plan to abandon the already familiar stimulus measures of monetary policy, which was launched later the global financial crisis.
Considering that on Wednesday, the yen showed growth, she also trading lower by 0.3% against the euro and 0.2% against the dollar, if we compare the figures with the beginning of this month. This is despite the fall WSJ dollar index by 2.2%, the unstable political situation, regular scandals in the United States, as well as the plans of the Federal Reserve System.
Many experts believe that this situation is to be expected, as the loose monetary policy in Japan, and will remain so in the long run. Analysts predict that the Bank of Japan left its monetary policy unchanged, as well as reduce the inflation forecasts.
Accordingly, we can say now that the Bank of Japan's policy is fundamentally different from that of other central banks of the US and Europe.
Many investors do not understand why at the moment the Fed abandoned its policy tightening plans. Instead, the regulator said the gradual tightening of policy, that is, rates will rise, but with time and gradually.
As for the Bank of Japan again, the experts believe that the bank will continue to stimulate the program until the end of 2018, while others are of the opinion that the program saved almost until 2020.
In this regard, the yen will lose its attractiveness for investors, which will likely lead to an increase in dollar / yen before the end of the year by about 5% to 118.
Hedge funds remain net short position on the yen in the amount of 12 billion dollars, the highest since October 2014.
But the situation could change if the market participants will wake up interest in safe haven against the backdrop of sharp fluctuations in the markets.
Based on materials WELTRADE
