USDJPY updated its 3-year lows; the “greenback” remains strong.
The Japanese Yen is looking weak against the USD on Tuesday. The current quote for the instrument is 114.71.
The pair “touched” its 3-year high at 115.15. For Japan, the weakening of the national currency is good in a way: domestic manufacturers look more competitive in the global arena. Exporters can also improve their positions.
Some more pressure is put on the Yen by the government’s new stimulus package agreed earlier. The package is worth about 10% of the GDP. Almost a half of this money will be steered into the real sector, as well as subsidies for businesses and the population. The increase in monetary flow in the economy has a quite consistent influence on the Yen.
Of course, the national debt issue, which will automatically grow in response to the new stimulus package, remains open. However, the Japanese government is in no hurry to focus on this problem as they truly believe that “rebooting” the country’s economy is a task with a higher priority than the national debt.
The demand for the Yen as a “safe haven” asset is rather low and most of the current pressure comes from the “greenback”.