Traders and investors have focused their attention over the past few weeks on the Japanese Yen, as well as the Japanese economy. Market analysts were shocked when the Bank of Japan unexpectedly changed a portion of its monetary policy in December. In this blog, we will explain why the Japanese Yen made the headlines of financial news outlets and how the Bank of Japan’s decisions have affected the country’s currency value.
Let’s talk about the Japanese Yen
After the US dollar, the euro and the Yen, the Japanese Yen ranks third in terms of currency trades. The most traded currency on the Asian continent is the Yen. Its name translates to “circle” in English, and it went into circulation for the first time in 1871. Traders will probably know the currency’s code which is JPY.
The Bank of Japan’s monetary policy and the Japanese Yen
As you’ll see in the news, one of the main missions of the Bank of Japan (or BoJ) is to implement monetary policy. At its December 2022 meeting, the BoJ’s governing board convened to decide on interest rates.
The council’s members announced that they would keep borrowing costs on hold but surprised markets with an unexpected tweak to its bond yield control…