By: Barbara Zigah
Earlier in the Asian trading session, the Bank of Japan followed through on earlier hints that an intervention in the Yen’s rise would be forthcoming. Shortly afterward, the Japanese Yen’s value dropped nearly 3.75% against the U.S. Dollar, though has since retreated somewhat. Analysts believe that the Bank of Japan will continue to intervene during the trading day to prevent the Yen from slipping below the78 Yen benchmark. As reported at 3:27 p.m. (JST) in Tokyo, the Yen was trading against the U.S. Dollar at 77.1250 Japanese Yen. Given the central bank’s intent, it is likely that a great deal of volatility could be ahead for the pair today.
Yesterday, the Swiss National Bank similarly moved to intervene in the Swiss Franc’s strong rise, a repercussion of investors’ drive to safe haven assets in this turbulent economic period. Most analysts don’t expect the interventions efforts to be of an enduring nature; historically, records show that at best, the trend lasts only for a few days before reverting. The common currency Euro moved higher against the Swiss Franc in Asian trading, gaining 1% on the EBS trading platform to trade at 1.1140 Swiss Francs, before retreating to 1.1102 Swiss Francs.