By: Barbara Zigah
Both the U.S. Dollar and the Japanese Yen slipped in Asian trading today following the announcement by Bank of America that it intends to repay the TARP (Troubled Asset Relief Program) funds over the coming week, to the tune of $45 billion. With that news, investor confidence was temporarily boosted, and investors moved to trim their holdings of the safe-haven currencies. Analysts suggest that this move by Bank of America heralds the first of several such payments from other major banks in the United States which received the bailout money. As reported at 3:47 p.m. (JST) in Tokyo, the Japanese Yen slipped to 87.93 Yen against the U.S. Dollar; in the previous session, it had lost nearly .9% versus the greenback, the largest single day’s decline in 1½ months.
Market players suggest that the Japanese Yen may be facing another round of selling, and they base this speculation on a growing belief that the Japanese government may be taking additional steps aimed at putting a halt to their economy’s deflationary trend and the foreboding of currency intervention. On Wednesday, Yukio Hatoyama, Japan’s Prime Minister, commented that the Yen’s appreciation could not remain unchecked, and though his comments were downplayed later by Hiofumi Hirano, the Chief Cabinet Secretary, it did not put a stop to Yen selling.