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Japanese stocks weaken, as the yen begins to strengthen against the U.S. dollar.
Last week, the Nikkei 225 index fell by more than 6.5% and this has allowed it to get into very bearish, so we could see further declines in the coming days. Because of this, the yen has started to strengthen against the U.S. dollar, hitting a 10 week high since April. Added to all this, this week, the Bank of Japan decided to leave its interest rate at 0.1% and the Monetary Policy Committee of the BOJ, issued a statement where they say that the Japanese economy is recovering, thanks to increased exports. The committee hopes to achieve price stability target of 2%, after deciding to keep the quantitative easing measures to stimulate the economy of the country of the rising sun.
Investors are worried face this situation in Japan, due to the fluctuation in the value of the yen and no wonder, because in the West, more precisely in the United States, there are fears that the U.S. central bank returns to its economic stimulus program. We should note also, that last Thursday, other Asian markets such as China and South Korea, lost earnings in their main index, due to the uncertainty we have with regard to future decisions of the U.S. Federal Reserve.
Technically, we could analyze the Yen is making a correction in the bearish trend that has been occurring since the end of 2012 (has lost 30% against the U.S. dollar between November and May), due to strong weakness this currency has had against the U.S. dollar and it would not be strange to see that the USDJPY rises back above the psychological level of 100.00.
With all this put on the table, Japanese Yen investors depend on the decisions made in the United States for now. Already in the BOJ decided to expand the economic stimulus program and the United States, he return the same stimulus situation? Only Mr. Bernanke and the Fed will give us that answer over the course of weeks, for now, just know that the uncertainty among investors begins to increase, compared to the situation in the country of the rising sun and of course, this uncertainty increases the fear that the profits of Japanese exporters start to see losses in earnings.
