Interest in the greenback returns

Published: 9 Jan at 9 AM Tags: Euro, Dollar,

As the Bank of Japan pushes ahead with a policy to reduce deflation by introducing stringent monetary policies the dollar has edged slightly higher against the yen following a retreat earlier in the week. It appears likely that the Japanese central bank will look to introduce an inflation target of 2 per cent.

According to sources close to the bank there is likely to be further monetary easing this month that will probably see an increase on the 101 trillion yen buying in place at the moment.

The euro is currently flat against the greenback at $1.3075. On Friday the euro hit its lowest level against the dollar in three weeks at $1.2998. A scheduled meeting on Thursday by the European Central Bank is likely to result in support for the single currency as a cut in interest rates may be put on hold. However, many analysts are predicting that a cut will come later on in the year.

The dollar hit 87.38 yen, an increase of 0.3 per cent, after hitting its lowest level in close to a week of 86.83 yen. Although it is still some way away from its recent 18-month high on 2 January of 115.995 yen, the euro settled at 114.19 yen, a rise of 0.3 per cent.

Shinzo Abe, Japan’s new Prime Minister, is looking to stimulate the economy by driving down the value of the yen.