Yen Reaches 100 Per Dollar with Poor Data

by on November 14, 2013 3:03 pm GMT

The yen has bounced off 100 per dollar twice this morning as data suggested the massive Bank of Japan (BoJ) quantitative easing program is not making leaps and bounds anymore.

Yen futures sank heavily overnight, currently down .6 percent, as Finance Minister Tara Aso said intervention in the markets is an important policy option of the BoJ. The yen fell lower against all 16 major currency peers and hit the lowest level since September.

The gross-domestic product figures out of Japan yesterday showed an increase of .5 percent, but it was lower than the previous quarter’s print of .9 percent, which was revised up from .6 percent.

Weaker than expected data out of Japan is likely to be met with further monetary easing. However, it may start to become challenging when the bank, itself, becomes the largest player in the debt, REITs, and exchange-trade fund markets.

The USDJPY crossed the pivotal 100 mark twice, but quickly receded from these levels. In the USDJPY & GBPJPY outlook, the dollar-yen was likely to see 100.61 on a close above 100. It is still a possibility, but the pair has yet to confirm the move. The yen could see a further boost from the BoJ, but a pullback to 99.60-65 can happen.

The dollar is currently pulling back from its intraday highs.

1D Chart of USDJPY

1D Chart of USDJPY

The GBPJPY, commonly referred to as Geppy, blasted through the yearly highs as the Bank of England (BoE) expressed that a rise in interest rates could be sooner than forecasted in an updated forward guidance statement by Governor Mark Carney. Geppy is currently marching upwards to 161.