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USD/JPY moved to the highest level in four years – Danske

FXStreet (Barcelona) - Arne Lohmann Rasmussen of Danske Bank notes USD/JPY moving to the highest level in four years aided by PM Abe’s announcements and news of BoJ Governor Kuroda now enjoying a clear majority among the board.

Key Quotes

“Yesterday Japanese Prime Minister Shinzo Abe announced that the planned hike in the consumption tax to 10% from 8% for October 2015 will be postponed by 18 months to April 2017.”

“In addition, he also dissolved the Lower House and called for an early election in December. The date for the election has not yet officially been announced but is expected to be 14 December.”

“Even though the announcements from Shinzo Abe was not a major surprise, USD/JPY moved to the highest level in four years, trading at 117.37 this morning.”

“Adding to the pressure was news that BoJ governor Kuroda now has a clear majority behind the record easing presented a month ago, as the board today voted 8-1 compared to 5-4 a month ago. Note that Fitch has warned that the delay of the tax increase could be negative for Japan’s rating.”

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