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With the new record higher to 165 yen with the euro, the Bank of Japan governor Toshiko Fukui doesn’t seem to express concern about the weakness on the part of the currency giving no hints on time with any increasing the interest rates.
The unanimous votes of no interest rates hike I the Bank of Japan remained unchanged had been a disappointment for some. The euro was traded at 165.10 yen at 3.57 having a record higher at 165.08.
Afterwards the commentary of Fukui has triggered to the fall in the yen which pressured the gain in the equity markets and the ongoing popularity of the carried trade where the investors borrow a low-yielding currency such as yen to invest in a high yield assets.
According to Fukui there will be no effect in the economy of Japan for the weaker yen. He gave no hints in the timing of the interest rates hike in Bank of Japan, he says that there is no change in the global view in inflation to reiterate the need in adjusting this rates.
According to an officer of Thomson IFR Markets, Miki Ozawa sounding quite neutral in the money policy , Fukui had not been seen concerned in the up and downside risk of it. Fukui’s neutral tone comes as a surprise to the market players since he had been so hawkish.
13:15
Posted on Jun-17-2007
