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Yen Nears Its Bottom by Ashraf Laidi 4/7/2005
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The yen’s doldrums have taken a turn to the worse as foreign disinterest in Japanese equities catches up with mounting economic concerns, suggesting a continuation in the Bank of Japan’s ultra loose monetary policy in the midst of a global central bank tightening. Japan’s overwhelming dependence on foreign oil combined with persistently inferior yields is pushing investors away from the currency and the stocks. Such a double whammy has severely punished yen sentiment.
While soaring oil prices are a clear negative in the major currency blocs, punishing the yen remains the easiest choice largely due to the Japan's 80% dependence on fossil fuel imports for its primary energy needs, with oil providing half of total energy requirements.
The latest data have spoken volumes of the Japan’s renewed sluggishness.
This article contains the following sections:
On the monetary policy side
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