Concerns About Strength of Japanese Yen

News in early August that Japanese politicians were concerned enough about the escalating value of the yen was enough to impact currency trading strategies and temporarily weaken interest in the yen. The Wall Street Journal reported on August 12 that the American dollar had reached a 15-year low of 84.72 yen, raising concerns that it could trigger a trade imbalance between the two countries.

A smart forex broker pays attention to possible government intervention in the currency markets. The Wall Street Journal reported that Japanese government officials had been concerned enough about the relative decline of the dollar in comparison to the yen to make it a point of emphasis in July. Minutes from the most recent Bank of Japan meeting showed that members felt that “with regard to the recent appreciation of the yen and the fall in Japanese stock prices, some members said that the effect on Japan’s economic activity should be examined closely.”

However, many forex brokers and forex robots understand that the Bank of Japan is hesitant to act on concerns about the currency. While the yen weakened slightly the day the Wall Street Journal report was released it stabilized by the following day.