Dollar Fails To Catch A Lift From Higher Yields, Bank Of Japan In Focus

Bank of Japan’s meeting on January 18, 2022, has come out as a turning point for the current month. Two issues were discussed with the main emphasis on the Bank of Japan committing to fix its monetary policies.

Another issue that the committee worked out in the meeting was the revision of the inflation forecast.

The fall in the value against the US Dollar extends to other traditional currencies and Cryptocurrencies.

Details

Monetary policies of the Bank of Japan have for long been criticized for being ultra-loose. In the meeting scheduled on January 18, 2022, the Bank has committed to resolving this issue.

The resolution of the monetary policies of the Bank of Japan came to light after US treasury yield rose to a 2-year high. This rise has not been supportive for other currencies as well. Every currency has either declined in terms of its value or remained steady on the trading board.

The US Dollar against the yen before the meeting was 114.5. This figure rose by 0.37% to touch the valuation of 115.05 after the meeting concluded.

It fluctuated back to a lower value of 114.84 per dollar, still higher than what it earlier was before the meeting.

Carlos Casanova, a Senior Asia Economist at UBP, said that two factors were pressurizing the depreciating value of the yen. These factors were the rise in the US yields and global reflation trade.

Yields of the US have two different figures portraying a similar picture. The US 2-year yield is the first figure. It has crossed the mark of 1%. This has happened for the first time since February 2020. Another figure is the Benchmark 10-years yield that rose by six basis points to touch the value of 1.8550%. This is the highest ever figure to have been registered since January 2020.

Management of the Bank of Japan has also revised its inflation forecast for the future. The monetary policy meeting concluded that inflation in the future would very well remain below the mark of 2%.

All the focus is now on the European zone. Investors have their eyes on the announcement that will be made by Christine Lagarde, the President of the European Central Bank. The minutes of the policy meeting that was held in December 2021 is expected to be published on January 20, 2022 (Thursday).

It is only the trade between the yen and the US dollar that has witnessed fluctuation in recent days. It goes beyond both the partners and extends to Euro, pound, Australian dollar, and Cryptocurrency.

Euro is down by 0.09% at the valuation of $1.1398, while the Australian dollar is at $0.7192, which is down by 0.23%. The pound is the only currency that has remained stable so far at the trading value of $1.3635.

Cryptocurrency, Bitcoin in specific, has gone down to $42,000 since it last touched the peak mark of $69,000 in November 2021.

Know about different online forex brokers before trading a foreign currency.