Can the Yen Drop Further?
During the last few weeks, one of the safest investments in the market was to go against the Yen. Even so the Yen saw some bullish corrections close to the weekend, last week was no exception. The Yen continues to sharply drop, especially against the Dollar and the Euro. The number one reason for the Yen’s weakness appears to be the Bank of Japan’s (BoJ) policy. The BoJ feels that it is the Japanese interest to keep a very weak Yen. The logic behind this stance is that the Japanese economy relies greatly on its export, and thus the weaker the Yen, the more exporters will allegedly profit. The main tool the BoJ uses in attempt to reach this target is the low interest rate. Japan currently holds the lowest interest rate in the in the industrial world, merely 0.10%. However, the BoJ’s policy may have missed its target. Last week, the Japanese Trade Balance was published. The report showed that the difference in value between imported and exported goods during September have accumulated to
