On Tuesday, the USD/JPY pair is decreasing - sales are continuing for the second consecutive day, and the yen is in demand as a "safe haven."
The Japanese yen continued to strengthen on Tuesday - the demand is there for the second day in a row. The current quote in the USD/JPY pair is 120.61. Of course, this is not enough to close off the dollar jump against the yen of 29 January, but the attempt is not too bad. Let me remind you that Friday's activity in the pair has been linked to the decision of the Bank of Japan to introduce negative interest rates under the stimulus.
Speaking today, the Minister of Finance of Japan Mr. Aso said that his department is very closely monitoring the banking system of the country after the decisions of the BoJ. There is a risk that not all banks will successfully survive the current time because of the difficulties with the functionality of the financial intermediary. The topic is the application of the negative interest rates – nobody worked with a similar precedent, and the whole system is tested literally on the move.
The difficulty is not in the absence of some of the links in the chain of money - liquidity in the system is present in the required quantities. The problem is that the demand for money is barely felt. That's really scary, because without a healthy financial interest there will not be recovery in any of the sectors of the economy.
The Finance Ministry are well aware of this. Typically, the regulator and ministry have the tools to stimulate bank demand. The question is how to restart consumer demand.
RoboForex Analytical Department
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